SECURITIES AND EXCHANGE COMMISSION
Proxy Statement Pursuant to Section 14(a) of the Securities
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Raymond James Financial, Inc.
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| OUR VISION | | | | OUR VALUES |
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| Our vision is to be a financial services firmas unique as thepeoplewe serve, transforming lives, businesses and communities through the power of personal relationships and professional advice. | | | | 
| | We put clients first. If we do what’s right for our clients, the firm will do well and we’ll all benefit. |
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| | We act with integrity. We put others above self, and what’s right above what’s easy. We believe doing well and doing good aren’t mutually exclusive. |
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OUR MISSION Our business is peopleand their financial well-being. We are committed to helping individuals, corporations and municipalities achieve their unique goals, while also developing and supporting successful professionals, and helping our communities prosper. | (2) | Form, Schedule or Registration Statement No.: |
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| |  | | We value independence. We respect autonomy, celebrate individuality and welcome diverse perspectives, while encouraging collaboration and innovation. |
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| | We think long term. We act responsibly, taking a conservative approach that translates into a strong, stable firm for clients, advisors, associates and shareholders. |
RAYMOND JAMES FINANCIAL, INC.
St. Petersburg, Florida 33716
10, 2020Dear Fellow Shareholder,
You are cordially invitedI am pleased to attend the 2018invite you to our 2020 Annual Meeting of Shareholders of Shareholders.
Raymond James Financial, Inc.,achieved record results in fiscal year 2019, despite market volatility and a decline in the equity markets in the beginning of the year. We continued our strong retention and recruiting of financial advisors, reaching a record total number of advisors, which will be held on Thursday, February 22, 2018, at 4:30 p.m., Eastern Time, atin turn supported record results in the Private Client Group, as well as for Raymond James Financial Center, located at 880 Carillon Parkway, St. Petersburg, Florida. Details ofBank and Asset Management. Meanwhile, strong results for M&A, stronger fixed income brokerage revenues and the tax credit funds business to be presented at the meeting can be found in the accompanying Notice of Annual Meeting and Proxy Statement.
When the Board of Directors entrusted me with the responsibilities of Chairman in February 2017, I pledged that I would dedicate my efforts to continue preserving and strengthening the core values Raymond James was founded upon: placing clients’ interests first, independence, integrity and conservative decision making. Tom’s dedication to supporting these values ensured they permeated the firm and are shared today by our Board of Directors and Executive Committee.
Fiscal 2017 washelped temper a
successful yeardifficult environment for
Raymond James. We made meaningful progress on several strategic initiatives, generated solid financial results, and endedequity brokerage revenues.Entering fiscal 2020 with records in almost all offor our key business metrics,revenue drivers, including assets under administration, financial assets under management, totalthe number of financial advisors, client assets under administration and net loans at Raymond James Bank. Looking aheadBank, we are well positioned for the year ahead. While lower short-term interest rates and political and economic uncertainties may present significant challenges – and as our industry is continuing to fiscal year 2018face increased regulatory burdens and beyond, I believepricing competition – we are focused on the long-term, never losing sight of our values,commitment to putting people first.
Our business is about people and their financial well-being, and we will continue to operate the people who live them every day, are whatfirm in a way that is consistent with our client-first, people-oriented culture. It is this approach that has set Raymond James apart. They are the core ofapart throughout our strategic positioninghistory. It has helped us weather uncertainty, and give me the utmost confidence in the long-term success of Raymond James.
We hope you are planningI am confident it will continue to attend the meeting. Your vote is important and we encourage youdo so for many years to vote promptly. Whether or not you are able to attend the meeting in person, please complete, sign and return your proxy card by mail, or vote via the Internet or the toll-free telephone number.
come.On behalf of the Board of Directors and the management of Raymond James, I extend our appreciation for your continued support.
Yours sincerely,
Paul C. Reilly
Chairman and Chief Executive Officer
Notice of 2020 Annual Meeting of Shareholders
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DATE: | Yours sincerely, |
| | Thursday, February 20, 2020 |
| Paul C. Reilly |
| Chairman and Chief Executive Officer |
Important Notice Regarding the Availability of Proxy Materials
for the Raymond James Financial, Inc. Shareholder Meeting
to be Held on February 22, 2018
NOTICE OF 2018 ANNUAL MEETING OF SHAREHOLDERS
Dear Raymond James Financial, Inc. Shareholder:
NOTICE IS HEREBY GIVEN that the 2018 Annual Meeting of Shareholders (the ‘‘Annual Meeting’’) of Raymond James Financial, Inc. (the ‘‘Company’’) will be held on Thursday, February 22, 2018, at 4:30 p.m., (local time) at the Raymond James Financial Center, located at 880 Carillon Parkway, St. Petersburg, Florida.
The following proposals will be voted upon at the Annual Meeting:
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1.TIME: | To elect eleven (11) directors to the Board of Directors, to hold office until the annual meeting of shareholders in 2019; | 4:30 p.m. (local time) |
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2.PLACE: | | Raymond James Financial Center Tower 3 Classroom 880 Carillon Parkway St. Petersburg, Florida |
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AGENDA: | | The following proposals will be voted upon: 1. To elect twelve (12) director nominees named in the Proxy Statement 2. To hold an advisory vote on our executive compensation; |
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| compensation 3. | To approve the Amended and Restated 2012 Stock Incentive Plan 4. To ratify the appointment of KPMG LLP as the company’sour independent registered public accounting firm for the fiscal year ending September 30, 2018; and |
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4. | 2020 5. To consider and act upon suchon any other business asthat may properly come before the meeting |
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| RECORD DATE: | | December 23, 2019 (“Record Date”) |
Who Can Vote: | | Shareholders of record on the Record Date |
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| Who Can Attend: | | Shareholders desiring to attend the Annual Meeting should review page 66 under Questions & Answers About Voting Your Shares. Directions to the Annual Meeting are available at www.raymondjames.com/investor-relations/news-and-events/shareholders-meeting |
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| Date of Mailing: | | We are mailing these proxy materials and the Annual Report to shareholders and participants in our Employee Stock Ownership Plan on or any adjournment thereof.about January 10, 2020 |
Vote Recommendation: The Board of Directors recommends a vote ‘‘FOR’’ Items 1, 2 and 3.
The following proxy materials for the Annual Meeting are being made available at “FOR” All Proposalswww.raymondjames.comunder ‘‘Investors — Shareholders’ Meeting’’ (www.raymondjames.com/investor-relations/shareholders-meeting):
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1.Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on February 20, 2020: | | The Proxy Statement, for the Annual Meeting; |
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2. | The 20172019 Annual Report to Shareholders;Shareholders and |
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3. | The the form of proxy card being distributed in connection with the Annual Meeting. Control/identification numbers are contained in the proxy materials accompanying this notice.available online atwww.raymondjames.com/investor-relations/ news-and-events/shareholders-meeting |
To obtain directions to attend the Annual Meeting, where you may vote in person, please visit our website at www.raymondjames.com/investor-relations/shareholders-meeting.
Only Raymond James shareholders of record on December 18, 2017 are entitled to notice of and to attend and vote at the Annual Meeting and any adjournment or postponement thereof. Whether or not you are able to attend in person, please complete, sign and return your proxy card by mail, or vote via the Internet or the toll-free telephone number.
Raymond James shareholders of record who attend the meeting may vote their shares in person, even though they have sent in proxies. | | |
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| | By Order of the Board of Directors, |
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| | Jonathan N. Santelli, Secretary |
| January 10, 2020 | | |
TABLE OF CONTENTS
Raymond James Financial, Inc. 2020 Proxy Statement | i
PROXY STATEMENT
Thisii | Raymond James Financial, Inc. 2020 Proxy Statement
Our Company
Raymond James Financial, Inc. is furnisheda leading diversified financial services company providing private client group, capital markets, asset management, banking and other services to individuals, corporations and municipalities. Our financial services activities include providing investment management services for retail and institutional clients, the underwriting, distribution, trading and brokerage of equity and debt securities, and the sale of mutual funds and other investment products. We also provide corporate and retail banking and trust services.
Ourmission is to help individuals, corporations and municipalities achieve their unique goals, while also developing and supporting successful professionals, and helping our communities prosper.
Ourvision is to be a financial services firm as unique as the people we serve, transforming lives, businesses and communities through the power of personal relationships and professional advice.
Among the keys to our success, our emphasis on putting the client first is at the core of our corporate values. We also believe in maintaining a conservative, long-term focus in all our decision making. We believe that this disciplined approach has helped us build a strong, stable financial services firm for our clients, advisors, associates and shareholders.
We are furnishing this Proxy Statement to you in connection with the solicitation of proxies by the Company’s Board of Directors (“Board” or “Board of Raymond James Financial, Inc. (‘‘Board’’ or ‘‘Board of Directors’’Directors”) for the Annual Meeting of Shareholders to be held on Thursday, February 22, 2018, at 4:30 p.m., Eastern Time.20, 2020 (“Annual Meeting”). In this Proxy Statement, we may refer to Raymond James Financial, Inc. as “Raymond James,” “RJF,” the ‘‘company,’’ ‘‘Raymond James,’’ ‘‘we,’’ ‘‘us’’“company,” “we,” “us” or ‘‘our.’’
QUESTIONS AND ANSWERS ABOUT VOTING YOUR SHARES
“our.”Corporate Governance
Item 1. — Election of Directors
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Why did I receive this Proxy Statement? | | You have received these proxy materials because Raymond James’s BoardProposal Snapshot — Item 1. Election of Directors is soliciting your proxy to vote your shares at the Annual Meeting on February 22, 2018. This proxy statement includes information that is designed to assist you in voting your shares and information that we are required to provide to you under the rules of the Securities and Exchange Commission (‘‘SEC’’). On January 8, 2018, we mailed this proxy statement to shareholders of record as of the close of business on December 18, 2017 (‘‘Record Date’’). |
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What is a proxy? | | A ‘‘proxy’’ is a written authorization from you to another person that allows such person (the ‘‘proxy holder’’) to vote your shares on your behalf. The Board of Directors is asking you to allow any of the following persons to vote your shares at the Annual Meeting: Paul C. Reilly, Chairman and Chief Executive Officer, and Thomas A. James, Chairman Emeritus. |
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Who is entitled to vote? | | Each Raymond James shareholder of record on the Record Date for the Annual Meeting is entitled to attend and vote at the Annual Meeting. |
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What is the difference between holding shares as a shareholder ‘‘of record’’ and as a ‘‘beneficial owner’’? | | l | Shareholders of Record. You are a shareholder of record if at the close of business on the Record Date your shares were registered directly in your name with Computershare, our transfer agent.
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| l | Beneficial Owner. You are a beneficial owner if at the close of business on the Record Date your shares were held by a brokerage firm or other nominee and not in your name. Being a beneficial owner means that, like most of our shareholders, your shares are held in ‘‘street name.’’ As the beneficial owner, you have the right to direct your broker or nominee how to vote your shares by following the voting instructions your broker or other nominee provides. If you do not provide your broker or nominee with instructions on how to vote your shares, your broker or nominee will be able to vote your shares with respect to some of the proposals, but not all. Please see ‘‘What if I return a signed proxy or voting instruction card, but do not specify how my shares are to be voted ?’’ for additional information.
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| | l | Raymond James has requested banks, brokerage firms and other nominees who hold Raymond James shares on behalf of beneficial owners of the shares as of the close of business on the Record Date to forward proxy materials to those beneficial owners. Raymond James has agreed to pay the reasonable expenses of the banks, brokerage firms and other nominees for forwarding these materials. |
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How many votes do I have? | | Every holder of a share of common stock on the Record Date will be entitled to one vote per share for each Director to be elected at the Annual Meeting and to one vote per share on each other matter presented at the Annual Meeting. On the Record Date there were 145,433,833 shares outstanding and entitled to vote at the Annual Meeting. |
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What proposals areis being presented atvoted on: Election to our Board of 12 director nominees. Board recommendation: After a review of the Annual Meeting?individual qualifications and experience of each of our director nominees and his or her contributions to our Board, our Board determined unanimously to recommend that shareholders vote FOR all of our director nominees. | | Raymond James intends to present proposals numbered one through three for shareholder consideration and voting at the Annual Meeting. These proposals are for: |
| | 1. | Election of eleven (11) members of the Board of Directors; |
| | 2. | Advisory vote to approve executive compensation; |
| | 3. | Ratification of the appointment of KPMG LLP as the company’s independent registered public accounting firm. |
| | Other than the matters set forth in this Proxy Statement and matters incident to the conduct of the Annual Meeting, Raymond James does not know of any business or proposals to be considered at the Annual Meeting. If any other business is proposed and properly presented at the Annual Meeting, the proxies received from our shareholders give the proxy holders the authority to vote on such matter in their discretion. |
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How does the Board of Directors recommend that I vote? | | The Board of Directors recommends that you vote: |
| l | FOR the election of the eleven (11) directors nominated by our Board and named in this proxy statement; |
| | l | FOR the approval, on an advisory basis, of the compensation of our named executive officers; and |
| | l | FOR ratification of the appointment of KPMG LLP as the company’s independent registered public accounting firm. |
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How do I attend the Annual Meeting? | | All shareholders are invited to attend the Annual Meeting.
If your Raymond James shares are held in a bank or brokerage account, contact your bank or broker to obtain a written legal proxy in order to vote your shares at the meeting. If you do not obtain a legal proxy from your bank or broker, you will not be entitled to vote your shares, but you can still attend the Annual Meeting.
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How do I vote and what are the voting deadlines? | | You may vote your shares in person at the Annual Meeting or by proxy. There are three ways to vote by proxy: |
| | l | By Mail: If you have received your proxy materials by mail, you can vote by marking, dating and signing your proxy card and returning it by mail in the enclosed postage-paid envelope. If you hold your shares in an account with a bank or broker (i.e., in ‘‘street name’’), you can vote by following the instructions on the voting instruction card provided to you by your bank or broker. Proxy cards returned by mail must be received no later than the close of business on February 21, 2018.
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| | l | Via the Internet: You can submit a proxy via the Internet until 1:00 a.m. Central Time on February 22, 2018, by accessing the web site at http://www.investorvote.com/RJF and following the instructions you will find on the web site. Internet proxy submission is available 24 hours a day. You will be given the opportunity to confirm that your instructions have been properly recorded.
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| | l | By Telephone: You can submit a proxy by telephone until 1:00 a.m. Central Time on February 22, 2018, by calling toll-free 1-800-652-VOTE (8683) (from the U.S. and Canada) and following the instructions.
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| | Even if you plan to be present at the Annual Meeting, we encourage you to vote your shares by proxy using one of the methods described above. Raymond James shareholders of record who attend the meeting may vote their shares in person, even though they have sent in proxies. |
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What if my shares are held in the Raymond James ESOP? | | For participants in the Raymond James Employee Stock Ownership Plan (the ‘‘ESOP’’), your shares will be voted as you instruct the trustee of the ESOP. There are three ways to vote: by returning your proxy card, via the Internet or by telephone. Please follow the instructions included on your proxy card on how to vote using one of the three methods. Your vote will serve as voting instructions to the trustee of the ESOP for shares allocated to your account. If you do not vote shares allocated to your account held in the ESOP, your shares will nevertheless be voted by the trustee in the same proportion as it votes the shares of ESOP participants who have instructed the trustee on how to vote. You cannot vote your ESOP shares in person at the meeting. To allow sufficient time for voting by the trustee of the ESOP, our transfer agent must receive your vote by no later than 5:00 p.m. Eastern Time on February 19, 2018.
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May I change or revoke my vote? | | Yes. You may change your vote in one of several ways at any time before it is exercised: |
| | l | Grant a subsequent proxy via the Internet or telephone; |
| | l | Submit another proxy card (or voting instruction card) with a date later than your previously delivered proxy; |
| | l | Notify our Secretary in writing before the Annual Meeting that you are revoking your proxy or, if you hold your shares in ‘‘street name,’’ follow the instructions on the voting instruction card; or |
| | l | If you are a shareholder of record, or a beneficial owner with a proxy from the shareholder of record, vote in person at the Annual Meeting. |
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What will happen if I do not vote my shares? | | l | Shareholders of Record. If you are the shareholder of record of your shares and you do not vote in person at the Annual Meeting, or by proxy by mail, via the Internet or by telephone, your shares will not be voted at the Annual Meeting.
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| | l | Beneficial Owners. If you are the beneficial owner of your shares, your broker or nominee may vote your shares only on those proposals on which it has discretion to vote. Under the rules of the New York Stock Exchange (‘‘NYSE’’), your broker or nominee has discretion to vote your shares on routine matters, such as Proposal 3, but does not have discretion to vote your shares on non-routine matters, such as Proposals 1 and 2. Therefore, if you do not instruct your broker as to how to vote your shares on Proposals 1 or 2, this would be a ‘‘broker non-vote,’’ and your shares would not be counted as having been voted on the applicable proposal. We therefore strongly encourage you to instruct your broker or nominee on how you wish to vote your shares.
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What is the effect of a broker non-vote or abstention? | | Under NYSE rules, brokers or other nominees who hold shares for a beneficial owner have the discretion to vote on a limited number of “routine” proposals when they have not received voting instructions from the beneficial owner at least ten days prior to the Annual Meeting. A ‘‘broker non-vote’’ occurs when a broker or other nominee does not receive such voting instructions and does not have the discretion to vote the shares. Pursuant to our By-laws, broker non-votes and abstentions are not counted as ‘‘votes cast’’ on such matter, but are counted for quorum purposes. |
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What if I return a signed proxy or voting instruction card, but do not specify how my shares are to
be voted?
| | l | Shareholders of Record. If you are a shareholder of record and you submit a signed proxy, but you do not provide voting instructions, all of your shares will be voted FOR Proposals 1, 2 and 3.
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| l | Beneficial Owners. If you are a beneficial owner and you do not provide the broker or other nominee that holds your shares with voting instructions, the broker or other nominee will determine if it has the discretionary authority to vote on the particular matter. Under NYSE rules, brokers and other nominees have the discretion to vote on routine matters, such as Proposal 3, but do not have discretion to vote on non-routine matters, such as Proposals 1 and 2. Therefore, if you do not provide voting instructions to your broker or other nominee, your broker or other nominee may only vote your shares on Proposal 3 and any other routine matters properly presented for a vote at the Annual Meeting.
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What does it mean if I receive more than one set of Proxy Materials? | | It means you own Raymond James shares in more than one account, such as individually and jointly with your spouse. Please vote all of your shares. Beneficial owners sharing an address who are receiving multiple copies of the proxy materials may contact their broker, bank or other nominee to request that only a single copy of such document(s) be mailed to all shareholders at the shared address in the future. In addition, if you are the beneficial owner, your broker, bank or other nominee may deliver only one copy of the proxy materials to multiple shareholders who share an address unless that broker, bank or other nominee has received contrary instructions from one or more of the beneficial owners. Raymond James will deliver promptly, upon request, a separate copy of the proxy materials to a shareholder at a shared address to which a single copy of such document(s) was delivered. Shareholders who wish to receive a separate written copy of such documents, now or in the future, should submit their request to our Secretary by writing Raymond James Financial, Inc., Attn: Secretary, 880 Carillon Parkway, St. Petersburg, Florida 33716. |
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What is a quorum? | | A quorum is necessary to hold a valid meeting. The presence, in person or by proxy, of shareholders representing a majority of the outstanding capital stock of the company entitled to vote at the meeting constitutes a quorum for the conduct of business. |
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What vote is required in order to approve each proposal? | | For each of Proposals 1, 2 and 3, the affirmative vote of a majority of the ‘‘votes cast’’ on such proposal at the Annual Meeting is required. Our By-laws provide that a majority of the votes cast means that the number of shares voted ‘‘for’’ a proposal must exceed the number of shares voted ‘‘against’’ such proposal. Abstentions and broker non-votes, if any, are not counted as ‘‘votes cast’’ with respect to such proposal. (In the case of any contested director election, directors are elected by a plurality of the ‘‘votes cast.’’) |
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How will voting on any other business be conducted? | | Other than the matters set forth in this Proxy Statement and matters incident to the conduct of the Annual Meeting, we do not know of any business or proposals to be considered at the Annual Meeting. If any other business is proposed and properly presented at the Annual Meeting, the persons named as proxies will vote on the matter in their discretion. |
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What happens if the Annual Meeting is adjourned or postponed? | | Your proxy will still be effective and will be voted at the rescheduled Annual Meeting. You will still be able to change or revoke your proxy until it is voted. |
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Who will count the votes? | | Our General Counsel and Secretary will act as the inspector of election and will tabulate the votes. |
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How can I find the results of the Annual Meeting? | | Preliminary results will be announced at the Annual Meeting. Final results will be published in a Current Report on Form 8-K that we will file with the SEC within four (4) business days after the Annual Meeting. |
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Who is paying for the costs of this proxy solicitation? | | We will bear the expense of soliciting proxies. We have retained MacKenzie Partners, Inc. to solicit proxies for a fee of approximately $15,000 plus a reasonable amount to cover expenses. Proxies may also be solicited in person, by telephone or electronically by Raymond James personnel who will not receive additional compensation for such solicitation. Copies of proxy materials and our Annual Report will be supplied to brokers and other nominees for the purpose of soliciting proxies from beneficial owners, and we will reimburse such brokers or other nominees for their reasonable expenses. |
PROPOSAL NO. 1
ELECTION OF DIRECTORS
GENERAL
Our Board of Directors currently has eleven (11) directors. A director holds office for a term of one (1) year, and until such director’s successor has been duly elected and qualified or until such director is removed from office under our By-laws or such director’s office is otherwise earlier vacated.
The Board has nominated the twelve (12) directors identified below as candidates for election at the Annual Meeting. All nominees are current directors of the company and were unanimously recommended forre-election by the Corporate Governance, Nominating and Compensation Committee (“CGN&C Committee”). (In accordance with our Corporate Governance Principles described below, Shelley G. Broader, who has served on our Board for 12 years, is not standing forre-election at the Annual Meeting.)
The Board has affirmatively determined that the following nine director candidates are independent: Charles G. von Arentschildt, Shelley G. Broader,Robert M, Dutkowsky, Jeffrey N. Edwards, Benjamin C. Esty, Francis S. Godbold, Thomas A. James,Anne Gates, Gordon L. Johnson, Roderick C. McGeary, Paul C. Reilly, Robert P. SaltzmanRaj Seshadri and Susan N. Story for election as directors of the company for a term of one (1) year. All such nominees are current directors of the company. Story.
Raymond James Financial, Inc. 2020 Proxy Statement | 1
Each nomineecandidate has indicated to the company that he or she would serve if elected. We do not anticipate that any nominee would be unable to stand for election, but if that were to happen, the Board may reduce the size of the Board, designate a substitute nominee or leave a vacancy unfilled. If a substitute is designated, proxies voting on the original director candidate will be cast for the substituted candidate.
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Charles G. von Arentschildt,59 Non-Executive Director Director Since: 2015 RJF Committees • Audit and Risk Other Public Directorships • Current: None • Former (past 5 years): None | | | | | | KEY EXPERIENCE AND QUALIFICATIONS | | |
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| | | | | • Financial services management: Many years of broad financial services management experience • Derivatives and trading expertise: A wealth of specific knowledge in the derivatives and trading segments of the financial services industry |
| | | | | CAREER HIGHLIGHTS • Independent private investor across a variety of asset classes (since 2005) • Deutsche Bank Securities Inc., a provider of investment banking and security brokerage services • Chairman of Global Markets, North America (2004 – 2005) • Chief Executive Officer and Head of Global Markets, North America (2002 – 2004) • Global Head of Finance, Global Head of Securitization and Global Head of Commodities • Regional Executive Committee (1998 to 2005) • Global Markets Management Committee (1997 to 2005) • Managing Director and Global Head of Metals, Commodities, Morgan Stanley, Inc., a global financial services firm (1992 – 1997) OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT • Former member, Gold and Silver Institute • Former member, New York Mercantile Exchange • Former Board Member and Treasurer, Boys and Girls Club of Greenwich, Connecticut (2003 – 2008) |
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Robert M. Dutkowsky,64 Non-Executive Director Director Since: 2018 RJF Committees • Audit and Risk Other Public Directorships • Current: Tech Data Corporation; U.S. Foods Holding Corp.; Pitney Bowes • Former (past 5 years): None | | | | | | KEY EXPERIENCE AND QUALIFICATIONS | | |
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| | | | | • Technology and technology risks: More than 40 years of experience in the information technology industry, including senior executive positions in sales, marketing and channel distribution with leading manufacturers and software publishers • Corporate governance and leadership: Valuable governance perspectives from substantial senior executive leadership roles and experience as a board member and chairman of several public and private companies |
| | | | | CAREER HIGHLIGHTS • Tech Data Corporation, a multinational IT products and services distribution company • Executive Chairman (2017 – present) • Chief Executive Officer (2006 – 2018) • President, Chief Executive Officer, and Chairman, Egenera, Inc., a multinational cloud manager and data center infrastructure automation company (2004 – 2006) • President, Chief Executive Officer and Chairman, J.D. Edwards & Co., Inc. an enterprise resource planning (ERP) software company(2002 – 2004) • President, Chief Executive Officer and Chairman, GenRad, Inc., a manufacturer of electronic automatic test equipment and related software(2000 – 2002) OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT • Board of Directors, United Way Suncoast • Board of Directors, Moffitt Research Committee • Advisory Board, University of South Florida Business School |
2 | Raymond James Financial, Inc. 2020 Proxy Statement
Under our By-laws, at any meeting of shareholders for the election of directors at which a quorum is present (other than a contested election), each director nominee receiving a majority vote shall be elected. A ‘‘majority vote’’ means that the number of votes cast in favor of a nominee exceeds the number of votes cast against the nominee. (Abstentions and broker non-votes, if any, are not counted as ‘‘votes cast’’ with respect to that nominee.) In a ‘‘contested election,’’ where the number of nominees exceeds the number of positions available for the election of directors, our By-laws provide that the directors elected shall be those nominees who have received the greatest number of votes (‘‘plurality’’). | | | | | | | | | | |
Jeffrey N. Edwards,58 Non-Executive Director Director Since: 2014 RJF Committees • CGN&C • Securities Repurchase Committee • Securities Offerings Committee Other Public Directorships • Current: American Water Works Company, Inc. • Former (past 5 years): None | | | | | | KEY EXPERIENCE AND QUALIFICATIONS | | |
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| | | | | • Financial services industry: More than two decades of capital markets and corporate finance experience at a global financial services firm • Review and preparation of financial statements: Experience as CFO of large financial services company provides valuable insights to our Board |
| | | | | CAREER HIGHLIGHTS • Chief Operating Officer, New Vernon Advisers, LP, a registered investment advisor (2009 – present) • Merrill Lynch & Co., Inc., a global financial services company • Vice Chairman (2007 – 2009) • Chief Financial Officer (2005 – 2007) • Head of Investment Banking for the Americas (2004 – 2005) • Head of Global Capital Markets and Financing (2003 – 2005) • Co-head of Global Equities (2001 – 2003) OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT • Director, The NASDAQ Stock Market (2004 – 2006) • Director, Medusind, Inc., a medical billing company (2012 – 2019) |
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Benjamin C. Esty,57 Non-Executive Director Director Since: 2014 RJF Committees • Audit and Risk (Chair) Other Public Directorships • Current: None • Former (past 5 years): None | | | | | | KEY EXPERIENCE AND QUALIFICATIONS | | |
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| | | | | • Finance, investment and risk management: Extensive knowledge of finance and deep experience in the mutual fund/investment management business, including evaluation of fund performance, investment strategies, valuation analysis, trading, and risk management • Financial services industry: Provides valuable insight to the Company’s investment banking, commercial banking, and asset management businesses, as well as its own financing activities • Executive leadership development: Experience in leadership development assists Board in oversight of management succession |
| | | | | CAREER HIGHLIGHTS • Harvard University Graduate School of Business Administration • Professor of Business Administration (1993 – present) teaching corporate finance, corporate strategy and leadership • Roy and Elizabeth Simmons Professor of Business Administration (with tenure, 2005 – present) • Head of the Finance Department (2009 – 2014) • Founding faculty Chairman, General Management Program (GMP), a comprehensive leadership program for senior executives OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT • Director and Chairman of Audit Committee, Harvard Business Publishing, anot-for-profit education company • Eaton Vance family of mutual funds • Independent Trustee (2005 – 2013) • Chairman, Portfolio Management Committee (2008 – 2013) • Director, Harvard University Employees Credit Union (1995 – 2001) • Member, Finance Committee • Finance and Investment Committee, Deaconess Abundant Life Communities, anot-for-profit continuing care retirement community (2017 – present) |
Raymond James Financial, Inc. 2020 Proxy Statement | 3
Under our Corporate Governance Principles, each nominee for membership on the Board must tender an irrevocable conditional resignation to the company, such resignation to be effective only upon (i) the director’s failure to receive the required vote in an uncontested election, and (ii) Board acceptance of such resignation. If any nominee for re-election fails to receive the required vote, the Corporate Governance, Nominating and Compensation Committee will recommend that the Board accept the resignation unless it determines that the best interests of the company and its shareholders would not be served by doing so. Absent such determination, the Board will accept the resignation no later than 120 days from the certification of the shareholder vote, subject to maintaining compliance with NYSE or SEC rules or regulations. The Board will promptly disclose publicly its decision to accept or reject such resignation and the reasons therefor. | | | | | | | | | | |
Anne Gates,59 Non-Executive Director Director Since: 2018 RJF Committees • Audit and Risk Other Public Directorships • Current: The Kroger Company; Tapestry, Inc. • Former (past 5 years): None | | | | | | KEY EXPERIENCE AND QUALIFICATIONS | | |
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| | | | | • Retail and consumer products insight: Over 25 years’ experience in retail and consumer products industry • International business and growth markets: Broad business background in finance, marketing, strategy and business development, including growing international businesses |
| | | | | CAREER HIGHLIGHTS • President, MGA Entertainment, Inc., a developer, manufacturer and marketer of toy and entertainment products for children (2014 – 2017) • The Walt Disney Company, a diversified multinational mass media and entertainment conglomerate (1991 – 2012) • Executive Vice President, Chief Financial Officer—Disney Consumer Products (2000 – 2007, 2009 – 2012) • Managing Director—Disney Consumer Products Europe and Emerging Markets (2007 – 2009) • Senior Vice President of Operations, Planning and Analysis (1998 – 2000) OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT • Board of Trustees, University of California, Berkley Foundation (2016 – present) • Board of Directors, Salzburg Global Seminar (2018 – present) • Board of Visitors, Fu Foundation School of Engineering and Applied Science, Columbia University (2012 – present) • Board of Directors, CADRE • Board of Trustees, PBS SoCal |
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Francis S. Godbold,76 Director – Vice Chairman Director Since: 1977 RJF Committees • Securities Offerings Committee (alternate) Other Public Directorships • Current: None • Former (past 5 years): None | | | | | | KEY EXPERIENCE AND QUALIFICATIONS | | |
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| | | | | • Senior leadership experience: Over 50 years of experience at our company (15 years as President), including managing the company through multiple economic/business cycles; extensive experience acquiring and integrating businesses for the company • RJ Bank leadership: Active participation in the formation of RJ Bank and service on its board since inception • Investment management expertise:Broad capital markets transaction experience in both favorable and difficult markets; led the firm’s entry into several new business segments • Lifelong commitment: An enduring commitment to our company, with significant personal and family stock ownership |
| | | | | CAREER HIGHLIGHTS • Raymond James Financial, Inc. • Vice Chairman (2002 – present) • Director, Raymond James Bank, N.A. (1994 – present) • Various senior management positions (1969 – 2002) OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT • Trustee Emeritus, Georgia Tech Foundation, Inc. (2011 – present) • Trustee, Georgia Tech Foundation, Inc. (2003 – 2011) |
4 | Raymond James Financial, Inc. 2020 Proxy Statement
As explained in our Corporate Governance Principles, the Board recognizes the value of continuity of non-executive directors who have experience with the company and who have gained over a period of time a level of understanding about the company and its operations that enables them to make a significant contribution to the deliberations of the Board without any ongoing impairment to their independence. Nevertheless, the Corporate Governance Principles contemplate that directors are normally expected to serve no more than 12 years on the Board. The Board reserves the right, in extraordinary circumstances, to waive the tenure limitation to allow a director to serve up to three additional one-year terms. | | | | | | | | | | |
Thomas A. James,77 Director – Chairman Emeritus Director Since: 1970 RJF Committees • Securities Repurchase Committee • Securities Offerings Committee Other Public Directorships • Current: None • Former (past 5 years): None | | | | | | KEY EXPERIENCE AND QUALIFICATIONS | | |
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| | | | | • Engaged and motivating leader who embodies our firm’s culture: Former Chairman and Chief Executive Officer of our company, with a unique understanding of our businesses and the financial services industry • Entrepreneurial mindset: Perspective of an entrepreneur who led the growth of the company founded by his father • Lifelong commitment: A deep, personal commitment to our company, exemplified by more than 50 years of service • Shareholder advocate: His large stock ownership position ensures that his interests are strongly aligned with those of our other shareholders |
| | | | | CAREER HIGHLIGHTS • Raymond James Financial, Inc. • Chairman Emeritus (2017 – present) • Chairman of the Board (1983 – 2017) • Chief Executive Officer (1970 – 2010) OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT • Financial Services Roundtable (2000 – present) • Chairman (2007) • Former Chairman, The Florida Council of 100 • Former Chairman, Securities Industry and Financial Markets Association (SIFMA) • Certified Financial Planner (1978 – present) • Member, Board of Trustees, The Salvador Dalí Museum • Founder, The James Museum of Western and Wildlife Art • Chairman, Chi Chi Rodriguez Youth Foundation (2006 – present) • Former Director, International Tennis Hall of Fame |
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Gordon L. Johnson,62 Non-Executive Director Director Since: 2010 RJF Committees • CGN&C (Chair) • Director of RJ Bank since 2007 Other Public Directorships • Current: None • Former (past 5 years): None | | | | | | KEY EXPERIENCE AND QUALIFICATIONS | | |
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| | | | | • Banking and financial services: Over 23 years of experience with unaffiliated banks • RJ Bank insights: Ten years as a director of RJ Bank, a significant part of our business • Entrepreneurial experience: Perspective of an entrepreneur and consumer of business-related financial services |
| | | | | CAREER HIGHLIGHTS • President, Highway Safety Devices, Inc., a full service specialty contractor (2004 – present) • Bank of America, N.A., a multinational investment bank and financial services company • Various managerial and executive positions (1992 – 2002) OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT • Director, Florida Transportation Builders Association (2007 – 2016) • Director, Santa Fe Healthcare (2008 – 2014) |
Raymond James Financial, Inc. 2020 Proxy Statement | 5
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Roderick C. McGeary,69 Independent Director Since: 2015 RJF Committees • Audit and Risk Other Public Directorships • Current: Cisco Systems, Inc.; PACCAR Inc. • Former (past 5 years): None | | | | | | KEY EXPERIENCE AND QUALIFICATIONS | | |
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| | | | | • Review and preparation of financial statements: Deep accounting and auditing knowledge acquired through many years with public auditing firm • Leadership and governance: Decades of board and leadership experience involving multiple industries • Technology and technology risks: Leadership experience with global technology companies |
| | | | | CAREER HIGHLIGHTS • Chairman, Tegile Systems, Inc., a manufacturer of flash storage arrays (2010 – 2012) • BearingPoint, Inc., a multinational management and technology consulting firm • Chairman (2004 – 2009) • Interim Chief Executive Officer (2004 – 2005) • Co-President andCo-Chief Executive Officer (1999 – 2000) • Chief Executive Officer, Brience, Inc., a provider of software that enables companies to personalize customer experiences through broadband or wireless devices (2000 – 2002) • Managing Director, KPMG Consulting LLC, a management consulting firm (April – June 2000) • KPMG LLP, the U.S. member of a global network of professional firms providing audit, tax and advisory services • Co-Vice Chairman of Consulting (1997 – 1999) • Audit Partner for various technology clients (1980 – 1988) OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT • Certified Public Accountant |
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Paul C. Reilly,65 Chairman and Chief Executive Officer Director Since: 2006 RJF Committees • Securities Repurchase Committee • Securities Offerings Committee Other Public Directorships • Current: None • Former (past 5 years): None | | | | | | KEY EXPERIENCE AND QUALIFICATIONS | | |
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| | | | | • Strong leader, with prior public company CEO experience: Prior experience as chief executive officer of two complex, global organizations (one of which was a public company) brings a perspective to the Board beyond the financial services industry • Auditing and strategic consulting perspective: Background as a CPA and financial services consultant • Leadership continuity: Previous service on our Board provides continuity with prior senior management |
| | | | | CAREER HIGHLIGHTS • Raymond James Financial, Inc. • Chairman (2017 – present) • Chief Executive Officer (2010 – present) • President (2009 – 2010) • Non-executive Director (2006 – 2009) • Chair, Audit Committee (2008 – 2009) • Korn Ferry International, a global organizational consulting firm • Executive Chairman (2007 – 2009) • Chairman and Chief Executive Officer (2001 – 2007) • Chief Executive Officer, KPMG International, a global network of professional firms providing audit, tax and advisory services(1998 – 2001) • National Managing Partner, Financial Services, KPMG LLP, the U.S. member of a global network of professional firms providing audit, tax and advisory services (1995 – 1998) OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT • Member, Board at Large, Securities Industry and Financial Markets Association (SIFMA) • Member, Board of Directors, American Securities Association • Former Member, The Florida Council of 100 • Former Member, Financial Services Roundtable • Former Director, United Way Suncoast • Cabinet Member and former Chairman, Tampa Heart Walk and Heart Ball for the American Heart Association • Member, The University of Notre Dame Business Advisory Council |
6 | Raymond James Financial, Inc. 2020 Proxy Statement
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Raj Seshadri,54 Non-Executive Director Director Since: 2019 RJF Committees • Audit and Risk Other Public Directorships • Current: None • Former (past 5 years): None | | | | | | KEY EXPERIENCE AND QUALIFICATIONS | | |
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| | | | | • Financial services management: Brings to our Board a rare combination of skills and experience from her roles at global brands in marketing, sales, business strategy, asset management, wealth management, andbusiness-to-business partnerships |
| | | | | CAREER HIGHLIGHTS • President, U.S. Issuers, Mastercard Incorporated, a global payments and technology company (2016 – present) • BlackRock, Inc., a global asset manager • Managing Director, Head of iShares Wealth Advisory (2014 – 2015) • Managing Director, Global Chief Marketing Officer for iShares (2012 – 2013) • Citigroup, Inc., a global financial institution • Managing Director, Head of CitiBusiness for Citibank (2010 – 2012) • Managing Director, Global Head of Strategy (2008 – 2009) • Various positions at U.S. Trust Company, a private wealth advisory firm (2006 – 2008), McKinsey & Company, a global strategy consulting firm (1994 – 2006) and AT&T Bell Laboratories, a research and development organization (1992 – 1993) OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT • Adjunct Professor, Columbia University Graduate School of Business (2012 – present) • Trustee, Mount Holyoke College (2017 – present) • Member, Management Board, Stanford Graduate School of Business (2017 – present) • Member, Global Board, American India Foundation (2019 – present) • Member, Advisory Board, SAYA (South Asia Youth Action) (2013 – present) • David Rockefeller Fellow (2017 – 2018) |
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Susan N. Story,59 Lead Independent Director Director Since: 2008 RJF Committees • CGN&C • Securities Repurchase Committee • Securities Offerings Committee Other Public Directorships • Current: American Water Works Company, Inc. (to retire April 1, 2020); Dominion Energy, Inc. • Former (past 5 years): None | | | | | | KEY EXPERIENCE AND QUALIFICATIONS | | |
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| | | | | • Leadership and strategy: Leadership as CEO of American Water Works Company, Inc., a $22 billion publicly traded company, has given herin-depth experience with addressing national economic challenges and regulatory and legislative issues • Experience managing highly-regulated industries: Her over five-year tenure as CEO (with prior experience as CFO) of the largest publicly-traded water and wastewater utility in the U.S., operating a highly-regulated utility business in 14 states and market-based businesses in 45 states, together with seven years as CEO of an electric utility in Florida, have provided extensive skills relating to interaction with state and federal regulators and managing complex organizations • Technology, cyber security and human capital management: Extensive experience developing and implementing technological advances, including artificial intelligence (AI) and machine learning; overseeing critical infrastructure cyber security protocols and working with the Department of Homeland Security, Department of Defense and state FUSION agencies; recruiting, hiring and training an evolving workforce population; and mitigating rising employee healthcare costs through innovative partnerships and programs |
| | | | | CAREER HIGHLIGHTS • American Water Works Company, Inc., a U.S. publicly traded water and wastewater utility company (to retire April 1, 2020) • President, Chief Executive Officer and director since May 2014 • Chief Financial Officer (2013 – 2014) • The Southern Company, a transporter and producer of energy • Chief Executive Officer, Southern Company Services, Inc., Executive Vice President of Southern (2011 – 2013) • President and Chief Executive Officer, Gulf Power Company, Inc. (2003 – 2010) • Executive Vice President, Engineering and Construction (2001 – 2003) • Senior Vice President of Southern Power Company (2001 – 2003) OTHER PROFESSIONAL EXPERIENCE AND COMMUNITY INVOLVEMENT • Board of Advisors, H. Lee Moffitt Cancer Center and Research Institute • Board, United Way of Greater Philadelphia and Southern New Jersey |
Raymond James Financial, Inc. 2020 Proxy Statement | 7
Director Independence
For a director to be considered independent under New York Stock Exchange (“NYSE”) rules, the Board must affirmatively determine that the director does not have any material relationship“material relationship” with the company, either directly or as a partner, shareholder or officer of an organization that has a relationship with the company. Such determinations are made and disclosed pursuant to applicable NYSE or other rules. A material relationship can include but is not limited to, commercial, industrial, banking, consulting, legal, accounting, charitable and family relationships. In accordance with the rules of the NYSE, theThe Board has affirmatively determined that itten (10) of our current directors (of whom nine (9) are standing for reelection) are “independent” under NYSE and U.S. Securities and Exchange Commission (“SEC”) rules.
Board Structure and Governance Practices
Role of the Board
Raymond James’ business and affairs are managed under the direction of the Board of Directors. The role of the Board is currently composedto oversee management of the company in its efforts to enhance shareholder value and conduct the company’s business in accordance with its mission statement. In this vein, the Board’s duties include assisting management to assess long-range strategies for the company and evaluating management performance.
Corporate Governance Principles
The Board has adopted Corporate Governance Principles, which are available in the Investor Relations section of the company’s website atwww.raymondjames.com(the “company’s website”). This document describes the principles the Board follows with respect to, among other matters, the Board’s:
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• role and duties | | • size and composition |
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• director responsibilities | | • leadership structure |
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• committees | | • access to officers, employees and advisors |
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• director compensation | | • confidentiality |
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• annual performance self-evaluation | | • communications with shareholders |
The Board’s Role in Risk Oversight
The Board exercises oversight responsibility with respect to management’s responsibilities to assess and manage our key risks, including market, credit, liquidity, funding, operational, compliance, compensation and reputational risk. The Board has delegated aspects of its oversight responsibility to each of the Audit and Risk Committee (“ARC”) and the CGN&C Committee.
The ARC’s role includes oversight of our risk governance structure and the performance of the Chief Risk Officer (“CRO”) and Chief Compliance Officer. The CRO directs our enterprise risk management program, under which we have prepared qualitative “risk appetite” statements that articulate our conservative risk culture. We have also developed tolerance statements and measures that attempt to quantitatively define appropriate adherence to our risk appetite. These statements are reviewed and approved by a majorityrisk committee structure designed to address specific aspects of independent directors,risk (e.g., market, liquidity, credit, operational, etc.), and that is organized under the following directors are independentdirection of our Enterprise Risk Management Committee (“ERMC”). The ARC reviews and do not have a material relationship withapproves these risk appetite and tolerance statements on at least an annual basis, and it receives periodic reports from the company: Charles G. von Arentschildt, Shelley G. Broader, Jeffrey N. Edwards, Benjamin C. Esty, Gordon L. Johnson, Roderick C. McGeary, Robert P. SaltzmanERMC and Susan N. Story.
Director and Nominee Qualifications to Serve on our Board
As described in greater detail below, the
Board believes that there are certain minimum qualifications that each director nominee must satisfyCRO in order to
be suitablemonitor our adherence to them. The ARC exercises oversight responsibility with respect to the company’s Internal Audit Department. In addition, the ARC receives quarterly risk assessments from the ERMC and CRO that identify new and emerging risks, changes to internal controls, and results of assurance activities, which include internal audits, regulatory examinations, and other self-assessment activities. The chair of the ARC discusses the significant aspects of the enterprise risk management program with the full Board at its regular meetings.8 | Raymond James Financial, Inc. 2020 Proxy Statement
The CGN&C Committee’s role is to review management’s evaluation of the relationship between our compensation policies and practices and risks arising for a position as a director. (See below under the caption ‘‘THE CORPORATE GOVERNANCE, NOMINATING AND COMPENSATION COMMITTEE.’’) company, and to take steps to prevent such policies and practices from encouraging unnecessary or excessive risk-taking. The CGN&C Committee also takes any action necessary to help the company comply with rules and regulations relating to compensation programs and their relationship to risk management.
Board Composition
The Board believes that, consistent with these requirements, each membercurrently consists of our Board is expected to demonstrate high standards of integrity and character and to offer important perspectives on some aspect of our business based on his or her own business experience.thirteen (13) directors. The Board does not consider individual directors to be responsible for particular areas of the Board’s focus or specific categories of issues that may come before it. Rather, the Board seeks to assemble a group of directors that, as a whole, represents a mix of experiences and skills that allows appropriate deliberation on all issues that the Board might be likely to consider.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE ‘‘Director QualificationsFOR’’ THE ELECTION TO THE BOARD OF EACH OF THE DIRECTOR NOMINEES.
The voting requirements for this proposalBoard believes there are described above and in the ‘‘Questions and Answers About Voting Your Shares’’ section.
INFORMATION ABOUT DIRECTOR NOMINEES
Listed below are the names, ages as of January 8, 2018, and principal occupations for the past five years of the director nominees (all of whom are currently directors of the company), together with a brief description of the particular experience or skills ofcertain minimum qualifications that each director
that lednominee must satisfy in order to be suitable for a position on the Board,
to concludeincluding that such
person should serve asnominee: | | |
• demonstrate high standards of integrity and character | | • offer important perspectives on some aspect of the company’s business based on experience |
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• may not be on the boards of more than three (3) other public companies | | • may not be subject to certain convictions or judgments of courts or regulatory authorities |
Nominating Process and Succession Planning — Board Commitments
The CGN&C Committee reviews the experience and qualifications of all potential nominees to the Board. In considering director candidates, the CGN&C Committee generally assembles all information regarding a director in lightcandidate’s background and qualifications, evaluates his or her mix of our businessskills and structure.
Charles G. von Arentschildt (57) Non-Executive Director — Member ofqualifications and determines the Audit and Risk Committee
Charles von Arentschildt has served as a non-executive director of our company since August 2015. Since 2005, Mr. von Arentschildt has been an independent private investor managing his personal investments across a variety of asset classes. Mr. von Arentschildt served as Chairman of Global Markets, North America, at Deutsche Bank Securities Inc. from 2004 through 2005. Previously, he had been Chief Executive Officer and Head of Global Markets North America since 2002. Prior positions held at Deutsche Bank include Global Head of Finance, Global Head of Securitization and Global Head of Commodities. Mr. von Arentschildt served on Deutsche Bank’s Regional Executive Committee from 1998contribution that the candidate could be expected to 2005 and its Global Markets Management Committee from 1997make to 2005. From December 1992 to March 1997, he served as Managing Director and Global Head of Metals, Commodities at Morgan Stanley, Inc. Mr. von Arentschildt was a member of the board of directors of the Carlyle Blue Wave Fund from 2007 to 2009. He has also been a director of the Gold and Silver Institute and a member of the New York Mercantile Exchange. Mr. von Arentschildt served as Treasurer and Board Member of Boys and Girls Club of Greenwich, Connecticut from 2003 to 2008.
Mr. von Arentschildt brings to our board many years of broad financial services management experience as well as a wealth of specific knowledge in the derivatives and trading segments of our industry.
Shelley G. Broader (53) Non-Executive Director — Member of the Audit and Risk Committee
Shelley Broader has served as a non-executive director of our company since 2008. She is director, President and Chief Executive Officer of Chico’s FAS, Inc. From June 2014 to November 2015, she was President and Chief Executive Officer of Walmart EMEA Region (Europe, Middle East, Sub-Saharan Africa and Canada). From July 2014 to October 2015, she was a non-executive Director, member of the Nomination Committee, the Remuneration Committee, and the Risk and Audit Committee of Massmart Holdings Limited, Sandton, South Africa. She previously served as President and Chief Executive Officer of Walmart Canada from September 2011 to May 2014. From March 2011 to March 2013, she was a Director of Wal-Mart de México, which is publicly traded on the Mexican stock exchange. She was Chief Merchandising Officer of Walmart Canada Corp., from December 2010 to September 2011, and Senior Vice President, Sam’s Club, a division of Wal-Mart Stores, Inc. from 2009 to 2010. She served as President and Chief Operating Officer of Michaels Stores, Inc. from 2008 to 2009, President and Chief Executive Officer, Sweetbay Supermarket, a division of Kash n’ Karry Food Stores, Inc., from 2006 to 2008, and President and Chief Executive Officer, Kash n’ Karry Food Stores, Inc. from 2003 to 2006. From 1991 to 2003, Ms. Broader held positions of increasing management responsibility at Hannaford Bros. Co., culminating in Senior Vice President, Business Strategy, Marketing and Communications. Her prior financial service industry experience includes Massachusetts Financial Services Company and Assistant Vice President at First Albany Corporation. Ms. Broader is a memberoverall functioning of the Board, of Advisors of the H. Lee Moffitt Cancer Center & Research Institute.
Ms. Broader brings to our Board a current retail consumer marketing perspective from outside the financial services industry coupled with a degree of financial services experience early in her career. That perspective provides us with current insights into marketing to the younger segment of the population, which we expect to become more useful to us as those individuals’ need for financial services increases with their wealth and age. In addition, she has had full profit and loss responsibility for significant operations of both public and private companies over the last several years, including her current position as Chief Executive Officer of Chico’s FAS.
Jeffrey N. Edwards (56) Non-Executive Director — Member of the Audit and Risk Committee
Jeffrey Edwards has served as a non-executive director of our company since 2014. Mr. Edwards has been the Chief Operating Officer of New Vernon Advisers, LP (‘‘NVA’’), a registered investment advisor, since 2009. At NVA, he is
responsible for legal, finance, administration, risk management, technology and investor relations. He also serves on that firm’s investment committee. Mr. Edwards has served as a director of New Vernon Mauritius since 2014. Prior to joining NVA, Mr. Edwards spent 22 years at Merrill Lynch & Co., Inc., most recently as Vice Chairman. His previous positions at Merrill Lynch & Co. included Chief Financial Officer, Head of Investment Banking for the Americas, Head of Global Capital Markets and Financing, and Co-head of Global Equities. He was a director of The NASDAQ Stock Market from 2004 − 2006, and has served as a director of Medusind, Inc., a privately held company, since 2012.
Mr. Edwards brings to the board more than two decades of capital markets and corporate finance experience at a large, global financial services firm.
Benjamin C. Esty (55) Non-Executive Director — Chairman of the Audit and Risk Committee
Professor Benjamin C. Esty has served as a non-executive director of our company since 2014. Professor Esty has been the Roy and Elizabeth Simmons Professor of Business Administration at the Harvard Graduate School of Business Administration since 2005 and was Head of the Finance Unit (i.e., department) from 2009 to 2014. Professor Esty has taught at Harvard about corporate finance, corporate strategy, and financial institutions for more than 20 years. He was the founding faculty chairman of Harvard’s General Management Program (GMP), a comprehensive leadership program for senior executives, and has participated in leadership development programs for companies and organizations outside academia. He was an independent trustee for the Eaton Vance family of mutual funds from April 2005 to December 2013, where he served as the Chairman of the Portfolio Management Committee from June 2008 to December 2013. He also served on the Governance and Contract Review Committees. Professor Esty was a member of the board of the Harvard University Employees Credit Union from 1995 to 2001, where he served on the finance committee that dealt with asset and liability management, setting loan and deposit rates, and doing financial forecasting/planning.
Professor Esty provides the board with an independent director with extensive knowledge of finance and in-depth experience in the mutual fund/investment management business, including evaluation of fund performance, investment strategies, valuation analysis, trading, and risk management. That knowledge and experience is valuable to the board with respect to the Company’s investment banking, commercial banking, and asset management businesses as well as its own financing activities. In addition, Professor Esty’s experience in leadership development assists the board in its oversight of the management succession process.
Francis S. Godbold (74) Director — Vice Chairman
Francis Godbold has served as a director of our company since 1977. He has been Vice Chairman of our company since 2002 and is a director and officer of various affiliated entities, including serving as a director of Raymond James Bank, N.A. (‘‘RJ Bank’’) and as a former member of its Executive Loan Committee. Mr. Godbold was a Trustee of Georgia Tech Foundation, Inc. from June 2003 to June 2011 and Trustee Emeritus since June 2011.
Mr. Godbold bringsgiving due consideration to the Board 46 yearsbalance of management experience at our company, including 15 yearsdiversity of serviceperspectives, backgrounds and experiences. The CGN&C Committee routinely considers diversity as Presidenta part of the company, capital market transaction experience in both favorable and diffıcult markets, significant stock ownership and an enduring commitmentits deliberations but does not have a formal policy regarding diversity. With respect to our company.
Thomas A. James (75) Chairman Emeritus
Tom James has served as Chairman Emeritus of the Board of the company since 2017, having also served as Chairman of the Board from 1983 to 2017 and Chief Executive Officer from 1970 to 2010. As Chief Executive Officer, Mr. James chaired the Company’s Operating Committee (now known as the Executive Committee), the monthly financial review and the budget process. Mr. James continues to chair our Compliance and Standards Committee. He has been active in the Financial Services Roundtable since 2000 and served as its Chairman in 2007. He is a former Chairman of The Florida Council of 100 and a former Chairman of the Securities Industry Association (now, the Securities Industry and Financial Markets Association). He has been a certified financial planner since 1978. Mr. James serves on the board of Cora Health Services, Inc. and was a director of OSI Restaurant Partners, Inc. from 2002 to 2008. He is the current president of the board of trustees of The Salvador Dalí Museum, is on the board of the International Tennis Hall of Fame,
and is the chairman of the Chi Chi Rodriguez Youth Foundation. During his career, he served on the boards of numerous public companies.
As our former Chairman and Chief Executive Offıcer, Mr. James’ more than 50 years of service to the company bring to the board a unique understanding of our businesses and the financial services industry, as well as the perspective of an entrepreneur who led the growth of our company founded by his father. His deep, personal commitment to Raymond James, including his large stock ownership position, means he is strongly aligned with the interests of shareholders.
Gordon L. Johnson (60) Non-Executive Director — Member ofdirectors, the CGN&C Committee
Gordon Johnson considers the individual’s past participation in, and contributions to, the activities of the Board. The CGN&C Committee recommends director nominees to the Board based on its assessment of overall suitability to serve.We understand that certain institutional investors and proxy advisory firms may deem Ms. Story overboarded based on her chief executive position and the number of public company boards on which she serves, resulting in concerns that she may face excessive time commitments in fulfilling her duties. The Board has served as a non-executive director of our company since 2010. Henoted that Ms. Story has been the President of Highway Safety Devices, Inc., a 150-employee company that installs and repairs signalization, guardrails, signage and street lighting related to municipal roadway projects, since 2004. Mr. Johnson has served as a Director of RJ Bank since May 1, 2007, as a Director of Santa Fe Healthcare from 2008 to 2014, and as a Director of Florida Transportation Builders Association from 2007 to 2016. Mr. Johnson was a banking manager and executive for 23 years, including 20 years with Bank of America and its predecessors. He also servedannounced her retirement as CEO of Stonegate Partners, LLC, a financial buyout firm, from 2002 to 2004.
Mr. Johnson brings 23 years of experience with unaffıliated banks and nine years as a director of RJ Bank to our Board at a time when RJ Bank has become a significant segment of the overall company. He also brings the perspective of an entrepreneur and consumer of business related financial services.
Roderick C. McGeary (67) Non-Executive Director — Member of the Audit and Risk Committee
Rod McGeary has served as a non-executive director of our company since November 2015. Mr. McGeary served as Chairman of Tegile Systems, Inc. from June 2010 to June 2012. From November 2004 to December 2009, he served as Chairman of the Board of BearingPoint, Inc. and also was interim Chief Executive Officer of BearingPoint from November 2004 to March 2005. BearingPoint filed for protection under Chapter 11 of the U.S. Bankruptcy Code in February 2009 and its plan under Chapter 11 was declared effective as of December 30, 2009. Mr. McGeary served as Chief Executive Officer of Brience, Inc. from July 2000 to July 2002. From April 2000 to June 2000, he served as a Managing Director of KPMG Consulting LLC, a wholly owned subsidiary of BearingPoint, Inc. (formerly KPMG Consulting, Inc.). From August 1999 to April 2000, he served as Co-President and Co-Chief Executive Officer of BearingPoint, Inc. From January 1997 to August 1999, he was employed by KPMG LLP as its Co-Vice Chairman of Consulting. Prior to 1997 he served in several capacities with KPMG LLP, including audit partner for technology clients. Mr. McGeary is a Certified Public Accountant and holds a B.S. degree in Accounting from Lehigh University. Mr. McGeary also currently serves on the board of directors of Cisco Systems, Inc. and PACCAR Inc. He previously served as a director of Dionex Corporation and National Semiconductor Corporation, each ending in 2011.
Mr. McGeary brings to our board, in addition to deep accounting and auditing knowledge, decades of board and leadership experience involving multiple industries, including with leading technology companies.
Paul C. Reilly (63) Chairman and Chief Executive Officer
Paul Reilly has served as Chairman of our company since 2017, as a director since 2006, and as Chief Executive Officer since May 1, 2010. He previously served as President of our company from May 1, 2009 to April 30, 2010. Mr. Reilly was a non-employee, independent director of the company from January 2006 until May 1, 2009 and chaired the Audit Committee from May 21, 2008 until May 1, 2009. Previously, he had served as Executive Chairman of Korn Ferry International from July 1, 2007 to April 30, 2009, and Chairman and Chief Executive Officer from 2001 to 2007. Mr. Reilly was Chief Executive Officer of KPMG International from 1998 to 2001. Prior to being named to that position, he was Vice Chairman, Financial Services, of KPMG LLP, the United States member firm of KPMG International. Mr. Reilly is a member of The Florida Council of 100 and of the Financial Services Roundtable. He is also a Director of United Way Suncoast, former Chairman and current Cabinet Member of the Tampa Heart Walk for the American Heart Association, and a member of The University of Notre Dame Business Advisory Council.
Mr. Reilly’s prior experience as chief executive offıcer of two complex and global organizations, one of which was a public company, combined with his background as a CPA and financial services consultant, brings a perspective to the board beyond the financial services industry, while his previous service on our board provides continuity with prior senior management.
Robert P. Saltzman (75) Non-Executive Director — Chairman of the CGN&C Committee
Bob Saltzman has served as a non-executive director of our company since 2007. Since retiring as President and Chief Executive Officer of Jackson National Life Insurance Company in 2001, Mr. Saltzman has managed his personal investments, occasionally consulted with parties unaffiliated with the company on life insurance matters and assisted a family member in connection with the purchase and financing of a private company in which he now is an investor. Mr. Saltzman was a director of WNC First Corporation, a privately held property and casualty insurance underwriter, from November 2004 to June 2011. He also served as a Director and Audit Committee Chairman of Enhance Financial Services, a New York Stock Exchange listed company, from 1998 until its acquisition in March, 2001. Mr. Saltzman serves as a Life Trustee of Northwestern University.
Mr. Saltzman’s 37 year career in the financial services industry included chief executive offıcer positions at major life insurers. In that role he also oversaw bank and broker-dealer affıliates as well as full service asset management companies, and he thus has experience in the management of large, complex organizations that are subject to extensive regulation. For these reasons, Mr. Saltzman’s experience correlates very well with the role of a company director.
Susan N. Story (57) Non-Executive Director (Lead Independent Director) — Member of the CGN&C Committee
Susan Story has served as non-executive director of our company since 2008. Ms. Story is President and Chief Executive Officer, and a director of American Water Works Company, Inc.
(NYSE: AWK),
effective April 1, 2020. While the
largest publicly traded U.S. waterBoard recognizes that outside board and
wastewater utility, serving over 15 million people in 47 statesother commitments could affect a director’s ability to devote sufficient time and
Ontario, Canada. Priorattention to board duties, after discussing this issue with Ms. Story our Board has concluded – based on ongoing significant contributions throughout her tenure – that Ms. Story’s existing CEO duties through March 31, 2020 will not limit her ability to devote sufficient time and attention to her
CEO role, which she assumed in May 2013, she servedduties as
ChiefLead Director of the company.Raymond James Financial, OfficerInc. 2020 Proxy Statement | 9
Illustrated below is an overview of the process to identify the desired skills and experience of candidates as well as evaluate potential candidates for the corporation. PriorBoard.
Nominations by Shareholders
The CGN&C Committee will consider candidates recommended for nomination to her movethe Board by shareholders under Florida law and ourBy-laws. OurBy-laws contain advance notice and a number of other requirements applicable to AWK, she spent 31 years at Southern Company (NYSE: SO), serving as Chief Executive Officer, Southern Company Services, Inc. and Executive Vice President of Southern from January 2011-March 2013; President and Chief Executive Officer, Gulf Power Company, Inc. from April 2003-December 2010; Executive Vice President, Engineering and Construction, Southern Company 2001-2003, while concurrently serving as Senior Vice President of Southern Power Company 2002-2003. Ms. Story has served asany shareholder nomination, including a director of Dominion Energy, Inc. since January 2017, where she is also a memberdescription of the Financeinformation that must be included with any such proposal. The manner in which the committee evaluates candidates recommended by shareholders would be generally the same as any other candidate. However, the CGN&C Committee would also consider information concerning any relationship between a shareholder recommending a candidate and Risk Oversight Committee. Ms. Story currently serves on the boardcandidate to determine if the candidate can represent the interests of all of the Bipartisan Policy Institute in Washington, D.C. and co-chairsshareholders. The committee would not evaluate a candidate recommended by a shareholder unless, among the organization’s effort to addressother requirements of ourBy-laws, the nation’s transportation and water infrastructure replacement challenges. She is also on the boardshareholder’s proposal contains all of the Allianceinformation necessary to Save Energyconduct an evaluation. For information regarding shareholder proposal deadlines, please see below under “Additional Information — Shareholder Proposals for the 2021 Annual Meeting.”
Election of Directors
Each director is elected by shareholders at our annual meeting for a term of one (1) year, (subject to extension until a successor is duly elected and qualified and subject to such director’s earlier resignation or removal). Under ourBy-laws, unless the election is contested, each director nominee must receive a majority vote to be elected. A “majority vote” means that the number of votes cast in favor of a nominee exceeds the number of votes cast against the nominee. In a contested election, directors are elected by a plurality of the votes cast.
In addition, each director nominee must tender an irrevocable conditional resignation to the company, to be effective only upon (i) the director’s failure to receive the required shareholder vote in an uncontested election, and (ii) Board acceptance of such resignation. If any nominee fails to receive the required vote, the CGN&C Committee will recommend that the Board accept the resignation unless it determines that the best interests of the company and its shareholders would not be served by doing so. Absent such determination, the Board will accept the resignation no later than 120 days from the certification of the shareholder vote, subject to maintaining compliance with NYSE or SEC rules. The Board will promptly disclose publicly its decision to accept or reject such resignation and the H. Lee Moffitt Cancer Center. Ms. Story also serves on the boardreasons therefor.
10 | Raymond James Financial, Inc. 2020 Proxy Statement
Director Tenure
We believe thatnon-executive directors (those directors who are not officers or employees of the United Way of Greater Philadelphia and Southern New Jersey. She is past chair of both the Florida Chamber of Commerce and the Florida Council of 100. Ms. Story is past vice-chair of Enterprise Florida (the state’s economic development organization) and was a member of the Florida Board of Education. She previously served on the board of the National Renewable Energy Laboratory. She also was appointed to the statutorily-required Tax and Budget Reform Commission of Florida, serving as chair of the Finance Committee of that Commission, which was tasked with evaluating the revenue and spending structure for Florida.
Ms. Story’s leadership as CEO of a $16+ billion publicly traded company, her nine-year tenure as CEO of an electric utility, her experience as Chief Financial Officer of a publicly traded company, and her resulting exposure to national economic challenges and state regulatory and legislative issues, provide her with in-depthcompany) who have longer-term experience with the following challenges faced bycompany have gained a level of familiarity with its operations that enables them to make valuable contributions to Board deliberations. Nevertheless, our Company: dealing with regulators; managing complex organizations; addressing the impact of technological advances on daily operations; overseeing cyber security protocols; dealing with a changing workforce population and mitigating rising employee healthcare costs. With an engineering undergraduate degree, an advanced degree in business administration and coursework in finance, she brings a diversified educational background to the issues faced by our Board.
CORPORATE GOVERNANCE
Corporate Governance Principles. The Board has adopted Corporate Governance Principles (‘‘Principles’’), whichcontemplate that directors are availablenormally expected to serve no more than 12 years on the Board. As previously noted, director Shelley G. Broader, who has served for 12 years, is not standing for re-election at the Annual Meeting. The Board reserves the right, in extraordinary circumstances, to waive this limitation to allow a director—if elected by the corporate governance sectionshareholders—to serve up to three additionalone-year terms. In this connection, the Board has determined that the need for continuity of service of the company’s Web site at www.raymondjames.com (the ‘‘company’s Web site’’). This document describesLead Director Susan Story constitutes a sufficient basis for waiving the principles the Board follows with respectabove tenure limitation to among other matters, the role and duties of the Board, size and composition of the Board, director responsibilities, Board leadership structure, Board committees, director accesspermit her to officers, employees and independent advisors, director compensation, confidentiality, the Board’s annual performance self-evaluation, and shareholder communications with the Board.serve a furtherone-year
term.Board Leadership Structure. StructureAs described in the Principles, the role of the Board is to oversee management of the company in its efforts to enhance shareholder value and conduct the company’s business in accordance with its mission statement. In this vein, the Board helps management assess long-range strategies for the company, and evaluates management performance.
The Board believes it is in the company’s best interests of the company for the Board to periodically evaluate its leadership structure and make a determination regarding whether to separate or combine the roles of Chairman and chief executive officer (“chief executive officer” or “CEO”) based on circumstances at the time of its evaluation. By retaining flexibility to adjust the company’s leadership structure, the Board believes that it is best able to provide for appropriate management and leadership of the company and address any circumstances the company may face. At the conclusion of theSince 2017, Annual Meeting of Shareholders, Mr. Thomas A. James relinquished his position as Chairman, and the Board appointed our chief executive officer, Mr. Paul Reilly, to succeed him, thereby combininghas also served as Chairman of the chief executive and Board chairman positions.Board. The Board believes that a combined Chairman/chief executive officer structure provides the company with a single leader who communicates the firm’s business and strategy to our shareholders, clients, employees, regulators and the public, promoting accountability for the company’s performance.
The Board also believes that independent leadership is important, and the Principles contemplate appointment of an independent director to serve as a lead director (“Lead Director”) whose role is to solicit agenda items and issues from non-executive directors for inclusion in the Board agenda and to organize and chair periodic meetings of the non-executive directors. Thus, since 2016, Ms. Susan N. Story has served as Lead Director. Ms. Story’s knowledge of the company’s business and strategy from her years of service as a director and her significant executive leadership experience contribute to her ability to fulfill the role of lead director effectively and independently.
For these reasons, the Board
believebelieves that our existing board leadership structure continues to be the most appropriate one for the company. Nevertheless, the Board may reassess the appropriateness of this structure at any time, including following future changes in Board composition, in management, or in the character of the company’s business and operations.
Lead Independent Director
The Board also believes that independent leadership is important, and it has appointed an independent director, Susan N. Story, who has served as lead director (“Lead Director”) since 2016. Ms. Story’s knowledge of the company’s business and strategy from her years of service as a director, together with her significant executive leadership experience, contribute to her ability to effectively fulfill the role of Lead Director. The Board has structured the role of our Lead Director to strike an appropriate balance to the combined Chairman and CEO role and to fulfill the important requirements of independent leadership on the Board.
Raymond James Financial, Inc. 2020 Proxy Statement | 11
The Board has approved a Charter for the Lead Director, which provides that the Lead Director is elected by the independent directors for a renewable term of three years. The charter also sets forth the Lead Director’s specific responsibilities, including to:
preside at Board meetings in the absence of the Chairman, subject to theBy-laws
review and approve Board meeting agendas and schedules
advise on information submitted to the Board
serve as liaison for communication betweennon-executive directors and shareholders
communicate individual performance feedback from board peer evaluations in private meetings with each director
preside over executive sessions ofnon-executive directors
recommend topics for Board consideration
serve as a liaison betweennon-executive directors and the Chairman
with the CGN&C Committee, facilitate the Board’s annual self-evaluation process
assist CGN&C Committee in conducting its performance evaluation of CEO and in CEO succession planning
The Charter of the Lead Director, which is available on the company’s website, provides a more detailed description of the role and responsibilities, qualifications, and the procedures for appointment of, the Lead Director.
Code of Ethics and Directors’ Code. Code
As part of our ethics and compliance program, our Board has approved a approved:
Code of Ethics for Senior Financial Officers (the ‘‘Code“Code of Ethics’’Ethics”) thatwhich applies to our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. In addition, we have adopted a separate functions, and
Code of Business Conduct and Ethics for Members of the Board of Directors (‘‘(“Directors’ Code’’Code”) that applies to all members of the Board.
Both the Code of Ethics and the Directors’ Code are posted on our company’s Web site.website. We intend to satisfy the disclosure requirement regarding any amendment to, or waiver of, a provision of, the Code of Ethics or the Directors’ Code by posting such information on our Web site.website. The company also maintains a reporting hotline (888-686-8351), where employees and individuals outside the company can anonymously submit a complaint or concern regarding compliance with applicable laws, rules or regulations, the Code of Ethics, as well as accounting, auditing, ethical or other concerns.
Board’s Role in Risk Oversight. We have an Enterprise Risk Management program under the direction of our Chief Risk Officer (‘‘CRO’’). The CRO and other members of the company’s management have prepared a series of qualitative ‘‘risk appetite’’ statements that articulate our conservative risk culture. Tolerance statements and measures have also been developed which attempt to quantitatively define appropriate adherence to our risk appetite. These statements are internally reviewed and approved by a risk committee structure established by management to address specific aspects of risk (i.e., market, liquidity, credit, operational, etc.), and are organized under the direction of our Enterprise Risk Management Committee (‘‘ERMC’’), which is chaired by the CRO. The Audit and Risk Committee subsequently reviews and
approves our risk appetite and tolerance statements on at least an annual basis, and receives periodic reports from the ERMC and the CRO in order to monitor our adherence to them. In addition, the Audit and Risk Committee receives quarterly risk assessments from the ERMC and the CRO that identify new and emerging risks, changes to internal controls, and results of assurance activities, which include internal audits, regulatory examinations, and other self-assessment activities. The chair of the Audit and Risk Committee discusses the significant aspects of the Enterprise Risk Management program with the full Board at its regular meetings.
Engagement with Shareholders. ShareholdersThe Board believes that fostering long-term relationships with shareholders and maintaining their trust and goodwill is a top priority for the company. We conductSenior management conducts engagements with key shareholders which cover a wide range of issues such as strategy, financial performance, governance and other current matters, throughout the year in order to ensure that our management and Board understand and address the issues that are important to our shareholders. These engagements cover a wide range of issues, such as strategy, financial performance, governance and other current matters. In addition to our quarterly earnings releases and related conference calls, we release monthly operating metrics providing updates on our business performance.metrics. Our chief executive officer, chief financial officer and our head of investor relations officer attend several investor conferences each year and also participate in several “roadshows” to meet with our investors. In addition, we host an award-winning annual investor day, onInvestor Day (typically at our corporate headquarters), at which our senior executives make presentations at our corporate headquarters concerning a wide variety of strategic and financial matters. Our chief financial officer and our head of investor relations officer also speak with analysts and investors throughout the year. Individual members of our Board may also be involved in appropriate cases. For information on how to contact members of our Board, please see the section below entitled “Communications“Additional Information—Communications with the Lead Director andNon-Executive Directors.”
12 | Raymond James Financial, Inc. 2020 Proxy Statement
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
Executive SessionsThenon-executive directors meet in executive session without management at least four times per year during a regularly-scheduled Board meeting. Ms. Susan Story, our Lead Director, presided at the regular executive sessions of thenon-executive directors.
BOARD MEETINGS AND ANNUAL MEETING OF SHAREHOLDERS
DuringCommittee Membership and MeetingsThe Board has delegated authority to committees to assist in overseeing the management of the company. The members and chair of each committee are appointed and removed by the Board. The committee chairs review and approve agendas for all meetings of their respective committees. The responsibilities of the ARC and the CGN&C Committee are defined in their respective charters, which incorporate the applicable requirements of the SEC and NYSE and are available at the company’s website atwww.raymondjames.com/investor-relations/corporate-governance/charters.
The following table identifies the Board’s committees, their respective members, and provides information about meetings during the fiscal year ended September 30, 2017,2019 (“fiscal 2019”).
| | | | | | | | |
Director | | Audit and Risk Committee | | Corporate
Governance,
Nominating and
Compensation
Committee | | Securities
Repurchase
Committee | | Securities
Offerings
Committee |
Charles G. von Arentschildt | | M | | — | | — | | — |
Shelley G. Broader(1) | | M | | — | | — | | — |
Robert M. Dutkowsky | | M | | — | | — | | — |
Jeffrey N. Edwards | | — | | M | | M | | M |
Benjamin C. Esty | | C | | — | | — | | — |
Anne Gates | | M | | — | | — | | — |
Gordon L. Johnson | | — | | C | | — | | — |
Roderick C. McGeary | | M | | — | | — | | — |
Susan N. Story | | — | | M | | M | | M |
Raj Seshadri(2) | | M | | | | | | |
Thomas A. James | | — | | — | | M | | M |
Paul C. Reilly | | — | | — | | M | | M |
Francis S. Godbold | | — | | — | | — | | AM |
| Fiscal 2019 Committee Meetings |
Total Committee Meetings | | 8 | | 5 | | 0 | | 0 |
M— Member,C— Chairman,AM — Alternate Member
| (1) | Not standing forre-election at the 2020 Annual Meeting. |
| (2) | Appointed effective June 1, 2019. |
The Board has affirmatively determined that each member of the ARC and the CGN&C Committee is “independent” under NYSE and SEC rules. The Board has further determined that each member of the ARC is “financially literate” and that each of Ms. Gates and Messrs. Esty and McGeary qualifies as an “audit committee financial expert” and has “accounting or related financial management expertise” under applicable NYSE or SEC rules.
Raymond James Financial, Inc. 2020 Proxy Statement | 13
Audit and Risk Committee
The ARC’s responsibilities include:
oversight of the independent auditor, including annually reviewing the independent auditor’s report and evaluating its qualifications, performance and independence
reviewing and discussing with management and the independent auditor (i) the audited financial statements and related disclosures, (ii) earnings press releases, (iii) critical accounting policies, (iv) internal controls over financial reporting and disclosure controls and procedures, (v) use ofnon-GAAP financial measures, and (vi) any audit problems
oversight of the company’s internal audit function
oversight of management’s responsibilities to manage key risks, including the company’s enterprise risk management program
oversight of the company’s risk governance structure
reviewing reports from the chief compliance officer and general counsel
The Audit and Risk Committee charter provides a more detailed description of the role and responsibilities of this committee.
Corporate Governance, Nominating and Compensation Committee
The CGN&C Committee’s responsibilities for compensation matters include:
annually approving senior management compensation structure
annually setting criteria for compensating the CEO, evaluating his or her performance and determining the amount of his or her compensation
reviewing succession planning for senior management, including the CEO
approving and overseeing the administration of equity-based and other incentive compensation plans
annually recommending to the Board the amounts of company contributions to employee benefit plans, and
overseeing administration of other employee benefit plans.
The CGN&C Committee’s responsibilities for nominations and corporate governance include:
reviewing the qualifications and experience of potential director nominees and recommending them to the Board
reviewing succession planning for the CEO and other senior management positions
developing and monitoring compliance with corporate governance policies
leading the Board and its committees in annual reviews of their performance
periodically reviewing and assessing our codes of ethics and recommending changes to the Board,
recommending reasonable director compensation to the Board, and
exercising sole authority to retain director candidate search firms, including determining their compensation and terms of engagement.
The CGN&C Committee charter provides a more detailed description of the role and responsibilities of this committee.
14 | Raymond James Financial, Inc. 2020 Proxy Statement
Securities Repurchase Committee
The Securities Repurchase Committee has authority (as determined by the Board) to approve certain purchases of our stock or notes from time to time. It does not have a separate charter or chairperson.
Securities Offerings Committee
The Securities Offerings Committee has authority (as determined by the Board) to approve the terms of securities offered by the company. It does not have a separate charter or chairperson.
Meeting Attendance
During fiscal 2019, the Board held sixfour meetings (not including committee meetings). Each director nominated forre-election at the Annual Meeting attended at least seventy-fiveone hundred percent (75%(100%) of the aggregate of the total number of meetings held by the Board and the total number of meetings held by all committees of the Board on which he or she served during fiscal 2017.2019. It is the policy of the Board that all directors attend the annual shareholder meeting. All of our directors other than Mr. Robert P. Saltzman (whose term was expiring) and Ms. BroaderRaj Seshadri (who did not join the Board until June 2019) attended the 2017February 2019 annual meeting.
Management Succession Planning
The non-executive directors (those directors who are not officers or employeesBoard believes that effective management succession planning, particularly for the CEO role, is important for the continued success of the company) meet in executive session at least four times per year during a regularly scheduled Board meeting without management. Ms. Susan Story, a non-executive and independent director and our Lead Director, presided atcompany. Among the regular executive sessionsresponsibilities of the non-executive directors.
COMMITTEE MEMBERSHIP AND MEETINGS
The current committeesCGN&C Committee is the review of succession planning for the Board areCEO and other senior management positions. Consequently, our CEO and chief human resources officer make detailed presentations to the Audit and Risk Committee, the Corporate Governance, Nominating and Compensation Committee, the Securities RepurchaseCGN&C Committee and the Securities Offerings Committee. The table below provides current membership information.
|
| | | | |
|
Audit and
Risk
| Corporate Governance, Nominating and Compensation |
Securities Repurchase Committee
|
Securities Offerings Committee
|
Charles G. von Arentschildt | M | — | — | — |
Shelley G. Broader | M | — | — | — |
Jeffrey N. Edwards | M | — | — | — |
Benjamin C. Esty | C | — | — | — |
Gordon L. Johnson | — | M | — | — |
Roderick C. McGeary | M | — | — | — |
Robert P. Saltzman | — | C | M | AM |
Susan N. Story | — | M | M | M |
Thomas A. James | — | — | M | M |
Paul C. Reilly | — | — | — | M |
Francis S. Godbold | — | — | — | AM |
_________________
M — Member, C — Chairman, AM — Alternate Member
BelowBoard annually on senior management succession plans and individual development plans for identified successors. This information is a descriptioncompiled through an organization-wide process designed to identify potential successors, evaluate the “readiness” of each committee ofinternal candidates and identify situations where the Board.company may need to consider external talent. The Board has affirmatively determined that eachdiscusses the development plans of the Audit and Risk Committee and the Corporate Governance, Nominating and Compensation Committee consists entirely of independent directors pursuant to rules established by the NYSE and rules promulgated under the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’).
THE AUDIT AND RISK COMMITTEE
The Audit and Risk Committee was chaired during fiscal 2017 by Mr. Esty. The committee currently consists additionally of Ms. Broader and Messrs. von Arentschildt, Edwards and McGeary. The committee met ten times during 2017. Under its charter, the committee:
is comprised of at least three members of the Board, each of whom is ‘‘independent’’ of the company under the NYSE and SEC rules and is also ‘‘financially literate,’’ as defined under NYSE rules,
includes at least one member who has accounting or financial management expertise, and at least one member who qualifies as an ‘‘audit committee financial expert’’ under applicable rules,
members and chair are appointed and removed by the Board,
members may not serve simultaneously on the audit committees of more than three public companies, including the company, unless the Board determines that such service would not impair such member’s effectiveness and such determination is disclosed under applicable rules,
is required to meet prior to each quarterly meeting of the Board and prior to the release of quarterly financial results,
periodically meets with the director of Internal Audit and the independent auditor in separate executive sessions without members of senior management present,
has the authority to retain independent advisors, at the company’s expense, wherever it deems appropriate to fulfill its duties, and
reports to the Board regularly.
The committee’s charter is available on the company’s Web site. The charter sets forth the committee’s responsibilities, which include:
the appointment, retention, compensation and oversight of the work of the independent auditor,
annually reviewing the independent auditor’s report and evaluating its qualifications, performance and independence,
pre-approval of the independent auditor’s engagement to provide any audit or permitted non-audit services,
reviewing and discussing with management and the independent auditor (i) the company’s audited financial statements and related disclosures, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations (ii) its earnings press releases and periodic filings, (iii) its critical accounting policies, (iv) the quality and adequacy of its internal controls over financial reporting, disclosure controls and procedures, and accounting procedures, (v) any use of non-GAAP financial measures, and (vi) any audit problems or difficulties,
approving in advance any proposed hiring of current or former employees of the company’s independent auditor,
exercising oversight with respect to the company’s internal audit function, including receiving and reviewing reports from the internal audit department regarding the results of audits undertaken and management’s response to recommendations,
exercising its authority to direct the internal audit department to undertake specific projects, including review of specific company departments,
exercising oversight with respect to management’s responsibilities to assess and manage key risks, including market, credit, liquidity, funding, operational and reputational risk,
exercising oversight of the company’s risk governance structure, including the performance of the CRO,
reviewing reports regarding major risk exposures, including the Enterprise Risk Management Report,
reviewing the pertinent risk parameterssuccession candidates, particularly for the
company’s most important risksCEO role, and
reviewingmonitors such candidates’ progress. High potential leaders are also given exposure to all Board members through formal presentations and
approving corporate risk assessmentinformal events, which provide directors with opportunities to personally assess the candidates’ skills and
management procedures,leadership capabilities.Raymond James Financial, Inc. 2020 Proxy Statement | 15
reviewing reports from the chief compliance officer regarding compliance activities, and from the general counsel regarding material legal and regulatory matters, and
preparing the annual report of the Audit and Risk Committee presented in the company’s proxy statement.
In connection with its oversight of management’s responsibilities to address key risks, the committee monitors and oversees the company’s Enterprise Risk Management program, which is under the direction of our CRO. Director Compensation
The CRO and other managers have prepared a series of qualitative appetite statements that articulate the company’s conservative risk culture. Tolerance statements and measures have also been developed which attempt to quantitatively define the company’s adherence to its risk appetite. These statements are internally reviewed and approved by a risk committee structure established by management to address specific aspects of risk (i.e., market, liquidity, credit, operational, etc.), and are organized under the direction of the ERMC which is chaired by the CRO. The committee subsequentlyCGN&C Committee reviews and approves these risk appetite and tolerance statements on at least an annual basis, and receives periodic reports from the ERMC and the CRO in order to monitor our adherence to them. In addition, the committee receives quarterly risk assessments from the ERMC and the CRO that identify new and emerging risks, changes to internal controls, and results of assurance activities, which include internal audits, regulatory examinations, and other self-assessment activities. Additionally, the chairman of the committee discusses the significant aspects of the Enterprise Risk Management program with the full Board at its regular meetings.
The committee has adopted a policy for pre-approving all audit and non-audit services provided by our independent auditors. The policy is designed to ensure that the auditor’s independence is not impaired. The policy provides that, before the company engages the independent auditor to render any service, the engagement must be specifically approved by the Audit and Risk Committee.
The Board has determined that each member of the committee is ‘‘financially literate’’ under the NYSE listing standards and is ‘‘independent’’ of the company under SEC rules and the NYSE listing rules. The Board has further determined that each of Messrs. Esty, Edwards and McGeary qualifies as an ‘‘audit committee financial expert’’ (as defined under the SEC’s rules and regulations) and also has ‘‘accounting or related financial management expertise.’’
THE CORPORATE GOVERNANCE, NOMINATING AND COMPENSATION COMMITTEE
The Corporate Governance, Nominating and Compensation Committee is chaired by Mr. Saltzman and currently consists additionally of Ms. Story and Mr. Johnson. The committee met six times during 2017. Under its charter, the committee:
is comprised solely of members of the Board who are ‘‘independent’’ of the company under the NYSE and SEC rules,
members are appointed and removed by the Board,
is generally required to meet prior to each quarterly meeting of the Board and to hold an additional meeting to approve incentive compensation awards for senior management,
has the authority to retain independent advisors, at the company’s expense, wherever it deems appropriate to fulfill its duties, including any compensation consulting firm or other adviser, and has direct responsibility for determiningdetermines the compensation of, and exercising oversight of the work of, any such adviser, and
reportspaid to the Board regularly.
The committee’s charter is available on the company’s Web site. The charter sets forth the committee’s responsibilities in relation to compensation matters, which include:
annually approving the compensation structure for senior management,
annually establishing criteria for the compensation of the chief executive officer, evaluating his or her performance and determining the amount of his or her compensation,
reviewing executive succession planning for senior management, including the chief executive officer,
reviewing and approving the company’s equity-based and other incentive compensation plans, and overseeing the administration thereof,
annually reviewing and recommending to the Board the amounts for the company’s contributions to employee benefit plans,
overseeing the administration of the company’s other employee benefit plans, and
preparing the annual report on executive officer compensation for the company’s proxy statement.
The committee meetsnon-executive directors at least every three years to reviewyears. We also reimburse each of ournon-executive directors for their travel expenses incurred in connection with attendance at Board and determine thecommittee meetings. Directors who are Raymond James employees (Messrs. Godbold, James and Reilly) do not receive any additional compensation of the company’s non-executivefor their services as directors. In reviewing and determiningnon-executive director compensation, the committee considers, among other things, the following principles:
that the compensation should fairly pay the non-executive directors for the work, time commitment and effortseffort required byfrom directors of an organization of the company’sin size and scope of business activities similar to the company, including service on Board committees,
that a component of the compensation should be designed to align the non-executive directors’ interests with the long-term interests of the company’s shareholders, and
that non-executive directors’director independence may be compromised or impaired for Board or committee purposes if director compensation exceeds customary levels.
As a part of its review, the committee has engaged Pay Governance LLC as a third-party consultant to report on comparablenon-executive director compensation practices and levels. No executive officer of the company is involved in determining or recommendingnon-executive director compensation levels. See the section of this Proxy Statement entitled ‘‘DIRECTOR COMPENSATION’’ below, for a more detailed discussion of compensation paid to the company’s directors during 2017.
The charter also sets forth the committee’s responsibilities in relation to nominations and corporate governance, which include:
identifying potential nominees for director, including candidates recommended by management, reviewing their qualifications and experience, and recommending to the Board a slate of nominees for consideration by shareholders,
developing and monitoring compliance with corporate governance policies,
leading the Board in an annual review of its performance, and of the performance of each Board committee,
periodically reviewing and assessing the company’s codes of ethics to determine whether any changes are appropriate and recommending any such changes to the Board for its approval,
making recommendations to the Board with respect to reasonable director compensation, after considering the impact of compensation levels on director independence, and
exercising sole authority to retain any search firm to identify director candidates, including sole authority for determining the compensation of, and other terms for the engagement of, any such firm.
The candidates proposed for election in Proposal No. 1 of this Proxy Statement were unanimously recommended by the committee to the Board.
The committee will consider candidates recommended for nomination to the Board by shareholders of the company. Shareholders may nominate candidates for election to the Board under Florida law and our By-laws. Under our By-laws,
notice of such a proposal must generally be provided to the Secretary not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting. In addition, our By-laws contain additional requirements applicable to any shareholder nomination, including a description of the information that must be included with any such proposal. For further information regarding deadlines for shareholder proposals, please see the section of this proxy statement below entitled ‘‘ADDITIONAL INFORMATION — Shareholder Proposals for the 2019 Annual Meeting.’’
The committee reviews the experience and qualifications of all potential nominees to the Board. The manner in which the committee evaluates candidates recommended by shareholders would be generally the same as any other candidate. However, the committee would also seek and consider information concerning any relationship between a shareholder recommending a candidate and the candidate to determine if the candidate can represent the interests of all of the shareholders. The committee would not evaluate a candidate recommended by a shareholder unless the shareholder’s proposal provides that the potential candidate has indicated a willingness to serve as a director, to comply with the expectations and requirements for Board service as publicly disclosed by the company and to provide all of the information required under our By-laws and necessary to conduct an evaluation.
The committee believes there are certain minimum qualifications that each director nominee must satisfy in order to be suitable for a position on the Board, including that such nominee:
be an individual demonstrating high standards of integrity and character;
offer important perspectives on some aspect of the company’s business based on his or her business experience;
may not be on the boards of more than three (3) other public companies; and
may not be subject to certain convictions, sanctions, judgments, orders or suspensions imposed by courts or regulatory authorities.
In considering candidates for director nominee, the committee generally assembles all information regarding a candidate’s background and qualifications, evaluates a candidate’s mix of skills and qualifications and determines the contribution that the candidate could be expected to make to the overall functioning of the Board, giving due consideration to the Board balance of diversity of perspectives, backgrounds and experiences. While the committee routinely considers diversity as a part of its deliberations, it has no formal policy regarding diversity. With respect to current directors, the committee considers past participation in and contributions to the activities of the Board. The committee recommends director nominees to the Board based on its assessment of overall suitability to serve in accordance with the company’s policy regarding nominations and qualifications of directors.
THE SECURITIES REPURCHASE COMMITTEE
The Securities Repurchase Committee consists of Thomas A. James, Robert P. Saltzman and Susan N. Story. This committee met three times during fiscal 2017. It has authority to approve certain purchases of our stock or notes from time to time. It does not have a separate charter.
THE SECURITIES OFFERINGS COMMITTEE
The Securities Offerings Committee consists of Thomas A. James, Paul C. Reilly and Susan N. Story, with Robert P. Saltzman and Francis S. Godbold as alternate members. This committee, which met once in fiscal 2017, has authority to approve the terms of securities offered under our shelf registration statement filed with the SEC. It does not have a separate charter.
DIRECTOR COMPENSATION
Directors who are Raymond James employees do not receive compensation for their services as directors. The CGN&C Committee reviews and determines the compensation paid to non-executive directors at least every three years. We also reimburse each of our non-executive directors for their travel expenses incurred in connection with attendance at Board of Directors and committee meetings.
The CGN&C Committee has recommended, and the Board has approved, the annual fees fornon-executive directors described in the table below. In May 2017,On February 28, 2019, the Board approved an increase in the CGN&C Committee’s recommendation to increase the annual cash retainer from $90,000 to $100,000 and the value of the SharesLead Director Fee from $125,000$25,000 to $150,000. (All$40,000. All annual cash fees are paid in quarterly installments in arrears for the period of service between regularly-scheduled Board meetings.)
Annual Retainer — Annual cash retainer of $100,000
Meeting Attendance Fees — No The company does not pay meeting attendance fees
Shares Fee — Annual award of restricted stock units with a value of $150,000, which units will vest in full on the first anniversary of the grant
Lead Director Fee — An additional annual cash fee of $25,000
Audit and Risk Committee Chair — An additional annual cash fee of $50,000
Corporate Governance, Nominating and Compensation Committee Chair — An additional annual cash fee of $15,000
fees. | | | | | | |
Director Fee Type | | Description | | Amount | |
| | | |
| Annual Retainer | | Cash retainer | | $ | 100,000 | |
| | | |
| Shares Fee | | Restricted stock unit (“RSU”) award vesting on 1st anniversary of grant | | $ | 150,000 | |
| | | |
| Lead Director Fee | | Supplemental cash fee for board leadership role | | $ | 40,000 | |
| | | |
| ARC Chair Fee | | Supplemental cash fee for committee leadership role | | $ | 60,000 | |
| | | |
| CGN&C Committee Chair Fee | | Supplemental cash fee for committee leadership role | | $ | 30,000 | |
We have also entered into indemnification agreements with each of ournon-executive directors, which provide for indemnification, to the fullest extent permitted by applicable law, with respect to all expenses and claims that a director incurs in connection with any event or occurrence related to the fact that the director was serving as a director, officer, fiduciary, employee, agent or advisor of Raymond James or any of our affiliates. Pursuant to the agreements, directors may also obtain advancement of certain expenses in connection with indemnified claims. (A copy of the form of indemnification agreement is an exhibit to our Annual Report on Form10-K, as filed with the SEC.)
Stock Ownership Policy for Non-Executive Directors
The Board maintains a Board and Executive Officer Stock Ownership Policy that requiresWe encourage our non-executive directors to attain certain levelsattend educational programs that assist them in the performance of ownershiptheir duties, and we reimburse reasonable costs of such attendance where approved in advance by the fifth annual directors meeting after their joining our Board. The policy requires non-executive directors to own shares of at least five (5) times the value of their annual cash retainer. For this purpose, shares held are valued at the weighted average of the closing prices on the NYSE on the date of each separate acquisition, and compliance with the policy is tested annually. Shares that count toward satisfaction of the requirement consist of shares directly or indirectly owned, shares jointly owned with immediate family members, shares owned indirectly through a retirement plan, and restricted stock and time-vesting RSUs during the vesting period. Until the required ownership level is achieved, each non-executive director must retain 100% of the net shares (after any deductions from the vesting award for exercise price or taxes) obtained through the company’s share incentive plans.company.
16 | Raymond James Financial, Inc. 2020 Proxy Statement
The following table shows, as of September 30, 2017, the status of our non-executive directors meeting the requirements of the policy.
|
| | | | | | |
| Name | Year Service Commenced | Shares of Stock Held (#) | Restricted Stock Units Held (#) | Total Shares Held (#) | Share Ownership Goal Met(1) |
| Charles G. von Arentschildt | 2015 | 3,935 |
| 1,580 | 5,515 | — |
| Shelley G. Broader | 2008 | 17,857 |
| 2,780 | 20,637 | ü |
| Jeffrey N. Edwards | 2014 | 8,257 |
| 2,380 | 10,637 | ü
|
| Benjamin C. Esty | 2014 | 7,557 |
| 2,380 | 9,937 | ü
|
| Gordon L. Johnson | 2010 | 13,087 |
| 3,800 | 16,887 | ü |
| Roderick C. McGeary | 2015 | 3397 |
| 1,580 | 4,977 | — |
| Robert P. Saltzman | 2007 | 20,357 |
| 2,780 | 23,137 | ü |
| Susan N. Story | 2008 | 20,714 |
| 2,780 | 23,494 | ü |
________________
| |
(1) | Based on our current compensation practices, it is anticipated that Messrs. von Arentschildt and McGeary will attain their share ownership goal within the time period prescribed by the policy. |
Director Compensation Table for 20172019
The following table sets forth the compensation paid to ournon-executive directors for services during fiscal year 2017.
|
| | | | | | | | | | | | | | |
Name (1) | Fees Paid in Cash ($)(2) | Stock Awards ($)(3) | All Other Compensation ($) (4) | Total ($) |
| Charles G. von Arentschildt | $ | 90,000 |
| | $ | 124,931 |
|
| $ | 2,336 |
| $ | 217,267 |
|
| Shelley G. Broader | $ | 90,000 |
| | $ | 124,931 |
| | $ | 7,452 |
| $ | 222,383 |
|
| Jeffrey N. Edwards | $ | 90,000 |
| | $ | 124,931 |
| | $ | 5,000 |
| $ | 219,931 |
|
| Benjamin C. Esty | $ | 132,500 |
| | $ | 124,931 |
| | $ | 5,000 |
| $ | 262,431 |
|
| Gordon L. Johnson | $ | 130,000 |
| (5) | $ | 148,589 |
| (6) | $ | 7,852 |
| $ | 286,441 |
|
| Roderick C. McGeary | $ | 90,000 |
| | $ | 124,931 |
|
| $ | 2,775 |
| $ | 217,706 |
|
| Robert P. Saltzman | $ | 105,000 |
| | $ | 124,931 |
| | $ | 7,452 |
| $ | 237,383 |
|
| Susan N. Story | $ | 115,000 |
| | $ | 124,931 |
| | $ | 7,452 |
| $ | 247,383 |
|
________________
2019. | | | | | | | | | | | | | | |
| Name(1) | | Fees Paid
in Cash(2) | | | Stock
Awards(3) | | | All Other
Compensation(4) | | Total | |
Charles G. von Arentschildt | | $ | 100,000 | | | $ | 149,954 | | | $1,956 | | $ | 251,910 | |
Shelley G. Broader | | $ | 100,000 | | | $ | 149,954 | | | $3,684 | | $ | 253,638 | |
Robert M. Dutkowsky(5) | | $ | 89,031 | | | $ | 212,387 | (6) | | $ — | | $ | 301,418 | |
Jeffrey N. Edwards | | $ | 100,000 | | | $ | 149,954 | | | $3,684 | | $ | 253,638 | |
Benjamin C. Esty | | $ | 155,000 | | | $ | 149,954 | | | $3,684 | | $ | 308,638 | |
Anne T. Gates | | $ | 100,000 | | | $ | 149,954 | | | $1,924 | | $ | 251,878 | |
Gordon L. Johnson | | $ | 168,500 | (7) | | $ | 174,893 | (8) | | $5,018 | | $ | 348,411 | |
Roderick C. McGeary | | $ | 100,000 | | | $ | 149,954 | | | $1,956 | | $ | 251,910 | |
Robert P. Saltzman(9) | | $ | 50,000 | | | $ | — | | | $3,684 | | $ | 53,684 | |
Raj Seshadri(10) | | $ | 22,024 | | | $ | 112,474 | (11) | | $ — | | $ | 134,498 | |
Susan N. Story | | $ | 132,500 | | | $ | 149,954 | | | $3,684 | | $ | 286,138 | |
| |
| (1) | Mr. Godbold, our Vice Chairman, is an employee who does not receive any additional compensation for services as a director. Please see the section below entitled “CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS”“Relationships and Related Transactions” for information regarding his compensation as an employee. |
| |
| (2) | Includes the annual retainer and, as applicable, Lead Director and committee chair fees. |
| |
| (3) | The amounts shown in this column represent the aggregate grant date fair value of restricted stock units (‘‘RSUs’’)RSUs granted to our directors who are not Named Executive Officers in fiscal year 2017. The2019. With the exception of RSUs awarded to Mr. Dutkowsky and Ms. Seshadri upon their appointment to the Board (see footnotes 6 and 11 below for more information) and Mr. Johnson for service as a director of RJ Bank, the grant date fair value per share of the RSUs granted to each of the directors in fiscal year 20172019 under Accounting Standards Codification (ASC) Topic 718 (‘‘(“ASC Topic 718’’718”) was $79.07.$83.82. Awards vest on the first anniversary of the grant. |
| |
| (4) | All other compensation represents accrued dividend equivalents on unvested restricted stock unitsRSUs as of September 30, 2017.2019. |
| |
| (5) | Appointed effective October 4, 2018. |
| (6) | Includes 662 RSUs awarded to Mr. Dutkowsky upon his appointment to the Board. The grant date fair value per share of these RSUs was $94.31. |
| (7) | The fees paid in cash to Mr. Johnson include $40,000 in fees$46,000 paid to him by RJ Bank for his service as a director of RJ Bank.director. |
| |
(6)(8) | Includes 300302 RSUs awarded to Mr. Johnson for services providedservice as a director of RJ Bank. The grant date fair value per share of these RSUs was $82.58. |
| (9) | Mr. Saltzman did not stand forre-election in 2019 and his term ended on February 28, 2019. |
| (10) | Appointed effective June 1, 2019. |
| (11) | Represents 1,362 RSUs awarded to Ms. Seshadri upon her appointment to the Board. The grant date fair value per share of these RSUs was $82.58. |
Raymond James Financial, Inc. 2020 Proxy Statement | 17
The aggregate number of share awards outstanding, as of September 30, 2017,2019, for each of ournon-executive directors was as follows:
|
| |
| Name | | Restricted
Stock Units
Outstanding
(#)
|
Charles G. von Arentschildt | 1,580 | 1,789 |
Shelley G. Broader | 2,780 | 1,789 |
Robert M. Dutkowsky | | 2,451 |
Jeffrey N. Edwards | 2,380 | 1,789 |
Benjamin C. Esty | 2,380 | 1,789 |
Anne Gates | | 1,789 |
Gordon L. Johnson | 3,800 | 2,571 |
Roderick C. McGeary | 1,580 | 1,789 |
Robert P. SaltzmanRaj Seshadri | 2,780 | 1,362 |
Susan N. Story | 2,780 | 1,789 |
SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS
Stock Ownership Policy for Directors and Executive OfficersThe following table sets forth the shares beneficially owned as of December 12, 2017 by each shareholder known to us to beneficially own more than five percent (5%) of the company’s outstanding shares. The percentage of ownership indicated inBoard maintains a Directors and Executive Officers Stock Ownership Policy that stipulates the following table is based on 145,316,996ownership levels of shares outstanding as of December 12, 2017.
|
| | | | | |
| Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership(1) | Percent of Class |
| Thomas A. James, Chairman Emeritus, Director, | 13,858,394 |
| | 9.54 | % |
| 880 Carillon Parkway, St. Petersburg, FL 33716 | | | |
BlackRock, Inc., 55 East 52nd Street, New York, NY 10022 | 10,914,212 |
| (2) | 7.70 | % |
| The Vanguard Group, Inc., 100 Vanguard Boulevard, | | | |
| Malvern, PA 19355 | 10,109,002 |
| (3) | 7.12 | % |
________________
our common stock thatnon-executive directors and executive officers are required to attain within five years of their election or the policy’s most recent adoption / revision (November 21, 2019). | | | | | | |
(1)Title | Except as described otherwise in the footnotes to this table, each beneficial owner in the table has sole voting and investment power with regard to the shares beneficially owned by such owner. |
| Holding requirement | | Valuation | | What counts? |
(2)Non-executive director | On January 25, 2017, BlackRock, Inc., on behalf | 5X annual retainer | | Average of itselfNYSE closing price during 60 days prior to measurement | | • Shares owned directly or jointly with family members • Shares owned indirectly • Unvested time-based restricted stock and certain of its affiliates (collectively, ‘‘BlackRock’’) filed a Schedule 13G/A with the SEC indicating that BlackRock had sole voting power with respect to 10,197,529 shares, and sole dispositive power with respect to 10,914,212 shares, of our common stock. |
| RSUs |
(3)Chief Executive Officer | On February 13, 2017, The Vanguard Group, Inc., on behalf of itself and certain of its affiliates (collectively, “Vanguard”) filed a Schedule 13G/A with the SEC indicating that Vanguard had sole voting power with respect to 102,565 shares, shared voting power with respect to 23,202 shares, sole dispositive power with respect to 9,981,343 shares, and shared dispositive power with respect to 127,659 shares, of our common stock. | 7X annual salary |
Executive Officers | | 3X annual salary |
SECURITY OWNERSHIP OF MANAGEMENT
An individual’s compliance with the policy is tested annually as of the last trading day of each fiscal year. Until the required ownership level is achieved, each individual must retain 100% of the net shares (after deductions for taxes or option exercise price) obtained through the company’s share incentive plans.
The following table lists the shares of common stock beneficially ownedshows, as of December 12, 2017 by (1) each director and director nominee, (2) each executive officer named inSeptember 30, 2019, the Summary Compensation Table below, and (3) all currentprogress of ournon-executive directors director nominees and executive officers as a group. The percentage of ownership indicated intowards meeting the following table is based on 145,316,996requirements of the company’s shares outstanding on December 12, 2017.
Beneficial ownership reported in the below table has been determined according to SEC regulations and includes shares that may be acquired within 60 days after December 12, 2017, upon the exercise of outstanding stock options and the vesting of restricted stock units. Unless otherwise indicated, all directors, director nominees and executive officers have sole voting and investment power with respect to the shares shown. Except as indicated, no shares are pledged as security. As of December 12, 2017, no individual director, director nominee or named executive officer other than Thomas A. James, our Chairman Emeritus, owned beneficially 1% or more of our shares, and our directors, director nominees and executive officers as a group owned approximately 10.46% of our outstanding shares.
|
| | | | | | | | | | | |
Name | Common Stock Beneficially Owned |
| Owned Shares |
| | Number of Shares Subject to Exercisable Stock Options | Number of Shares Subject to Vesting of Restricted Stock Units | Total Number of Beneficially Owned Shares | Percent of Class |
|
| Thomas A. James | 13,854,744 |
| (1)(2) | — |
| 3,650 |
| 13,858,394 |
| 9.54 | % |
| Charles G. von Arentschildt | 3,935 |
| | — |
| — |
| 3,935 |
| * |
|
| Shelley G. Broader | 17,857 |
| | — |
| — |
| 17,857 |
| * |
|
| John C. Carson, Jr. | 55,835 |
| (2) | 7,500 |
| 3,764 |
| 67,099 |
| * |
|
| Jeffrey N. Edwards | 8,257 |
| | — |
| — |
| 8,257 |
| * |
|
| Benjamin C. Esty | 7,557 |
| | — |
| — |
| 7,557 |
| * |
|
| Francis S. Godbold | 154,611 |
| (2) | — |
| — |
| 154,611 |
| * |
|
| Gordon L. Johnson | 13,087 |
| | — |
| — |
| 13,087 |
| * |
|
| Jeffrey P. Julien | 55,050 |
| (2)(3) | 19,190 |
| 2,281 |
| 76,521 |
| * |
|
| Roderick C. McGeary | 3,397 |
| | — |
| — |
| 3,397 |
| * |
|
| Paul C. Reilly | 107,519 |
| (2) | 19,890 |
| 14,142 |
| 141,551 |
| * |
|
| Robert P. Saltzman | 20,357 |
| | — |
| — |
| 20,357 |
| * |
|
| Susan N. Story | 20,174 |
| | — |
| — |
| 20,174 |
| * |
|
| Jeffrey E. Trocin | 159,186 |
| (2) | 37,500 |
| 6,387 |
| 203,073 |
| * |
|
| Dennis W. Zank | 199,063 |
| (2) | 9,890 |
| 4,220 |
| 213,173 |
| * |
|
All Directors and Executive
Officers as a Group
(25 persons) | 14,935,621 |
| (2) | 232,267 |
| 61,357 |
| 15,229,245 |
| 10.46 | % |
__________________
policy. | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Year Service
Commenced | | Shares of
Stock Held
(#) | | Restricted Stock
Units Held
(#) | | Total Shares
Held
(#) | | Share
Ownership
Goal Met (1) |
Charles G. von Arentschildt | | | | 2015 | | | | | 7,159 | | | | | 1,789 | | | | | 8,948 | | | ✓ |
Shelley G. Broader | | | | 2008 | | | | | 22,281 | | | | | 1,789 | | | | | 24,070 | | | ✓ |
Robert M. Dutkowsky | | | | 2018 | | | | | — | | | | | 2,451 | | | | | 2,451 | | | — |
Jeffrey N. Edwards | | | | 2014 | | | | | 12,281 | | | | | 1,789 | | | | | 14,070 | | | ✓ |
Benjamin C. Esty | | | | 2014 | | | | | 11,581 | | | | | 1,789 | | | | | 13,370 | | | ✓ |
Anne Gates | | | | 2018 | | | | | 1,617 | | | | | 1,789 | | | | | 3,406 | | | — |
Gordon L. Johnson | | | | 2010 | | | | | 18,328 | | | | | 2,571 | | | | | 20,899 | | | ✓ |
Roderick C. McGeary | | | | 2015 | | | | | 6,621 | | | | | 1,789 | | | | | 8,410 | | | ✓ |
Raj Seshadri | | | | 2019 | | | | | — | | | | | 1,362 | | | | | 1,362 | | | — |
Susan N. Story | | | | 2008 | | | | | 25,138 | | | | | 1,789 | | | | | 26,927 | | | ✓ |
| |
| (1) | Includes 662,754 shares heldBased on our current compensation practices, it is anticipated that Mr. Dutkowsky, Ms. Gates and Ms.��Seshadri will attain their share ownership goals within the time period prescribed by the Robert A. James Irrevocable Trust, for which Thomas A. James serves as trustee, and which has as beneficiaries other James family members. Thomas A. James disclaims any beneficial ownership interest in this trust. Includes 108,087 shares held by Thomas A. James’ spouse.policy. |
| |
(2) | Includes shares credited to Employee Stock Ownership Plan accounts. |
| |
(3) | Includes 3,740 shares held by Mr. Julien’s spouse. |
18 | Raymond James Financial, Inc. 2020 Proxy Statement
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This section of our Proxy Statement presents a discussion and analysis of the philosophy and objectives of our Board’s Corporate Governance, Nominating and Compensationthe CGN&C Committee (referred to in this section as the “Committee”(“Committee”) in designing and implementing compensation programs for our executive officers. This section describesWe describe the 2017 compensation determinationsdecisions relating to our chief executive officer, chief financial officer, and our next three most highly compensatedhighly-compensated executive officers (referred to as our(collectively, “named executive officers” or “NEOs”). Our named executive officers, who for 20172019 were:
Paul C. Reilly, Chief Executive Officer
Jeffrey P. Julien, Executive Vice President — Finance, Chief Financial Officer and Treasurer
John C. Carson, Jr., President
Jeffrey E. Trocin, Co-President - Global Equities and Investment Banking - Raymond James & Associates, Inc.
Dennis W. Zank, Chief Operating Officer
We seek to establish and maintain compensation policies that will enable us to attract, motivate and retain high-quality executive officers and ensure that their individual interests are aligned with those of our shareholders. Our goal is to utilize our compensation programs to reward executive officers for the achievement of short-term and long-term strategic and operational goals and increased total shareholder return, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking. Our executive officers’ total compensation is comprised of a mix of base salary, annual incentive bonus (which includes both cash and time- and performance-based vesting restricted stock unit awards), grants of retention restricted stock units, and retirement plan contributions. The Committee does not utilize formulaic financial performance goals or targets in awarding compensation. Rather, the Committee reviews company and individual performance each year, and then applies its discretion in determining the appropriate amounts of compensation for the fiscal year, based on a variety of factors, both objective and subjective.
Fiscal 2017 Company Performance Highlights
Financial Performance. Our company generated strong financial results in fiscal 2017. We achieved record annual net revenues of $6.37 billion and record net income of $636.2 million, or $4.33 per diluted share. On a non-GAAP basis, adjusted net income was $768.1 million(1), or $5.23 per diluted share(1). Our other financial accomplishments during the year included:
Net revenues increased 18% and diluted earnings per share increased 19% compared to fiscal 2016,
| |
• | Adjusted diluted earnings per share of $5.23(1) increased 33% compared to adjusted diluted earnings per share of $3.93 in fiscal 2016,
|
| |
• | Our return on equity for the fiscal year was 12.2%, or 14.5%(1) on an adjusted basis, which is a satisfactory result particularly given our prudent capital position throughout fiscal 2017,
|
The ratio of the firm’s total capital to risk-weighted assets remained above 20% throughout the year, well above regulatory requirements,
The company’s debt credit ratings were upgraded by both Standard & Poors and Moody’s, and
The company was added to the S&P 500 index.
________________
(1) Adjusted net income, adjusted net income per diluted share, and adjusted return on equity are non-GAAP measures. Please refer to page 38 of our Annual Report on Form 10-K for the fiscal year ending September 30, 2017, filed with the SEC on November 22, 2017, for reconciliations of these measures to the most directly comparable GAAP measures and other required disclosures.
23
The firm’s solid performance in fiscal 2017 was driven by record annual net revenues and pre-tax income in all of our core segments.
Private Client Group - Record net revenues of $4.42 billion increased 22% and record pre-tax income of $373.0 million increased 10% over fiscal 2016. Record net revenues were driven by strong growth in assets in fee-based accounts, a significant net increase in the number of financial advisors to a record 7,346, and the benefit derived from higher short-term interest rates. Private Client Group assets under administration ended the fiscal year at a record $659.5 billion, representing 15% growth over September 30, 2016. Despite elevated legal and regulatory expenses during the year, the increase in revenues coupled with disciplined management of discretionary expenses helped the Private Client Group segment generate record pre-tax income in fiscal 2017.
Capital Markets - Record net revenues of $1.01 billion and record pre-tax income of $141.2 million both increased 1% over fiscal 2016. Record results in the Capital Markets segment were lifted by record investment banking revenues of $398.7 million, which were up 31% over fiscal 2016. Improved M&A and equity underwriting results more than offset both the decline in trading profits and the market-driven decline in institutional commissions.
Asset Management - Record net revenues of $487.7 million increased 21% and record pre-tax income of $171.7 million increased 30% over fiscal 2016. Record net revenues were driven by growth in financial assets under management, which reached a record $96.4 billion at the end of the fiscal year. The 25% annual growth in financial assets under management was mostly attributable to strong net inflows in fee-based accounts in the Private Client Group, market appreciation, and modest net inflows generated by Carillon Tower Advisers / Eagle.
Raymond James Bank - Record net revenues of $592.7 million increased 20% and record pre-tax income of $409.3 million increased 21% over fiscal 2016. Record results were driven by robust loan growth, as diversification of the loan portfolio with a focus on lending to clients of the Private Client Group and Capital Markets segments helped mitigate the modest decline of the C&I portfolio. Net loans at Raymond James Bank
________________
(1) Adjusted net income, adjusted net income per diluted share, and adjusted return on equity are non-GAAP measures. Please refer to page 38 of our Annual Report on Form 10-K for the fiscal year ending September 30, 2017, filed with the SEC on November 22, 2017, for reconciliations of these measures to the most directly comparable GAAP measures and other required disclosures.
24
finished the year at a record $17.0 billion, reflecting 12% growth for the year. The Bank also increased its available-for-sale, agency-backed securities portfolio, which ended the year at $2.1 billion. Despite diversification outside the higher-yielding C&I portfolio, the increase in short-term interest rates helped the Bank’s net interest margin increase by 6 basis points on year-over-year basis.
Strategic Execution. In addition to outstanding financial results, the firm successfully executed several strategic initiatives during fiscal 2017. In the Private Client Group segment, in addition to excellent organic growth of financial advisors, the successful integrations of the Alex. Brown and 3Macs acquisitions, which closed in late fiscal 2016, significantly expanded the Private Client Group footprint in highly-desirable markets in both the U.S. and Canada. Similarly, the successful integration of the Mummert & Company acquisition in the Capital Markets segment broadened and strengthened our cross-border M&A platform, which contributed to the record investment banking revenues generated in fiscal 2017. In the Asset Management segment, we continued to increase the utilization of both managed and non-managed fee based accounts by our Private Client Group clients. Raymond James Bank continued to utilize its lending solutions to better serve clients in the Private Client Group and Capital Markets segments, and initiated its efforts to deliberately grow its agency-backed securities portfolio to efficiently utilize its capital. Finally, we continued investing heavily in technology to strengthen our relationships with our advisors and clients and to remain compliant with regulatory requirements. Most importantly, we successfully implemented these strategic initiatives while maintaining our unique, client-focused culture.
Summary of Compensation Decisions for 2017
After assessing the company’s financial and strategic performance for fiscal 2017, and after further evaluating the individual performance of our named executive officers, the Committee exercised its discretion to award total annual direct compensation for 2017 to our NEOs as set forth in the following table. For purposes of this table, ‘‘total annual direct compensation’’ means the sum of (i) salary for the fiscal year indicated, (ii) the annual bonus (both cash and equity components) and (iii) retention RSUs earned during such fiscal year but awarded in the subsequent fiscal year.
|
| | | |
| Total Annual Direct Compensation |
| Named Executive Officer | Fiscal 2017 | Fiscal 2016 | Percentage Increase/(Decrease) |
| Paul C. Reilly | $11,090,000 | $8,414,400 | 31.80% |
| Jeffrey P. Julien | $3,121,500 | $2,689,700 | 16.05% |
| John C. Carson, Jr. | $3,391,500 | $3,559,700 | (4.73)% |
| Jeffrey E. Trocin | $4,246,500 | $2,564,661 | 65.58% |
| Dennis W. Zank | $4,021,500 | $3,689,700 | 8.99% |
This table depicts how the Committee viewed its compensation decisions for our NEOs, but the presentation herein differs substantially from the Summary Compensation Table (‘‘SCT’’) on page 39 that is required by SEC rules. This table is not a substitute for the information presented in the SCT. Among other differences, the table above includes equity awards in the column for the fiscal year they were earned, rather than the year in which the grant date occurred. Please see the note on page 32 for further important information on the differences between this presentation and the SCT.
While it considers numerous factors with respect to company and individual performance during the year, as well as certain market data regarding compensation levels for particular comparable industry positions, the Committee does not attempt to rank or assign relative weight to any particular factor. The Committee does not rely on any single factor as a substitute for its own judgment in making compensation decisions, but rather applies its independent discretion in considering them in their entirety. Although the Committee did not ‘‘benchmark’’ compensation against the compensation practices of a peer group, it did engage an outside compensation consultant, Pay Governance LLC, to provide certain market data in connection with its 2017 compensation determinations for certain of our executive officers, including our chief executive officer. The Committee uses such data as reference material to assist it in maintaining a general awareness of industry compensation standards and trends. The market data does not formulaically determine the Committee’s compensation
________________
(1) Adjusted net income, adjusted net income per diluted share, and adjusted return on equity are non-GAAP measures. Please refer to page 38 of our Annual Report on Form 10-K for the fiscal year ending September 30, 2017, filed with the SEC on November 22, 2017, for reconciliations of these measures to the most directly comparable GAAP measures and other required disclosures.
25
decisions for any particular executive officer. The Committee does not target a particular percentile of the peer group with respect to total pay packages or any individual component of pay.
For 2017, the Committee approved the use of four peer groups:
A “corporate” peer group that was considered in reference to compensation decisions for Messrs. Reilly and Julien (our chief executive officer and chief financial officer, respectively), which included compensation information for similar positions in companies of comparable size to Raymond James (“Corporate Peers”),
A second peer group that was considered in reference to compensation decisions for Mr. Carson (our President, Fixed Income and Public Markets), which included compensation information for similar positions in companies of size and complexity comparable to this business unit within Raymond James (“Fixed Income Peers”),
A third peer group that was considered in reference to compensation decisions for Mr. Trocin (our Co-President, Global Equities and Investment Banking), which included compensation information for similar positions in companies of size and complexity comparable to this business unit (“Equity Capital Markets Peers”), and
A fourth peer group that was considered in reference to compensation decisions for Mr. Zank (our chief operating officer), which included compensation information for similar positions in companies of size and complexity comparable to this business unit within Raymond James (“Brokerage Company Peers”).
The following table lists the companies that make up each of these peer groups:
|
| | | |
Corporate Peers | Fixed Income Peers | Equity Capital Markets Peers | Brokerage Company Peers |
Affiliated Managers Group | Fifth Third Bank | Evercore Partners Inc. | B. C. Ziegler & Co. |
Ameriprise Financial Inc. | First Tennessee/First Horizon | FBR & Co. | Branch Banking & Trust Co. |
Charles Schwab Corp. | Stifel | Guggenheim Partners | D.A. Davidson & Co. |
E Trade Financial Corp. | Piper Jaffray | Janney Montgomery Scott Inc. | Hilliard Lyons |
Edward Jones | Robert W Baird | Jefferies | Janney Montgomery Scott Inc. |
Franklin Resources Inc. | Vining Sparks | JMP Group LLC | RBC Wealth Management |
Invesco Ltd. | PNC | KeyCorp. | Robert W. Baird & Co. Inc. |
Lazard Ltd. | SunTrust | Leerink Partners | Southwest Securities |
Legg Mason, Inc. | Wells Fargo | Macquarie Group Limited | Stifel, Nicolaus & Co., Inc. |
Leucadia National Corp.Name | | Moelis & Company | Title |
LPL Financial Holdings Inc. | | Nomura Securities | |
Northern Trust Corp. | | Keycorp/Pacific Crest | |
Robert W. Baird | | Piper Jaffray | |
State Street Corp. | | Robert W. Baird & Co. | |
Stifel Financial Corp. | | SunTrust/Robinson Humphrey | |
T. Rowe Price Group Inc. | | | |
TD Ameritrade Holding Corp.Paul C. Reilly | | | |
For its evaluation of 2017 compensation, the Committee - on the recommendation of its outside consultant - determined to revise the Corporate Peers used in the prior year by replacing Comerica with Affiliated Managers Group. The Committee made this change after determining that Comerica’s business mix was not well aligned with the company due to its heavy commercial and industrial loan focus, while Affiliated Managers Group met all of the selected industry and financial criteria.
Elements of Compensation
The Committee seeks to utilize a balanced mix of compensation elements to achieve its goals, with total compensation for our executive officers heavily weighted towards variable elements that reward performance. The following table describes each component of our executive compensation program, how it is determined, and the purpose or purposes we believe it accomplishes.
|
| | | | | | |
Compensation Type | Pay Element | How It Is Determined | What It Does |
Fixed | | Base Salary | ➢ | Varies with experience, dutiesChairman and scope of responsibility | ➢ | Provides a base level of fixed payChief Executive Officer |
| | |
| Jeffrey P. Julien | | ➢ | InternalExecutive Vice President (EVP) — Finance and external market factorsChief Financial Officer (CFO) |
| | |
| James E. Bunn | | | ➢ | Reviewed annually and adjusted effective at the beginning of each calendar year | | |
Variable | | Annual Bonus — Cash | ➢ | Based upon company’s annual financial results and progress against strategic objectives | ➢ | Provides a competitive annual incentive opportunity |
| | | ➢ | Funded from a pool not to exceed 6% of consolidated pre-tax income, with no individual bonus to exceed 3% | | |
| | | ➢ | If annual bonus exceeds $275,000, a portion is delivered in the form of equity awards − see below | | |
Variable | | Annual Bonus — Equity | ➢ | If annual bonus exceeds $275,000, a variable portion of the amount above $250,000 is delivered in the form of restricted stock units (‘‘RSUs’’) | ➢ | Aligns executive with shareholder interests |
| | | ➢ | Equity proportion increases with size of bonus | ➢ | Encourages retention by vesting at end of 3-year period |
| | | ➢ | One-half of RSUs vest on 3rd anniversary of grant
| | |
| | | ➢ | One-half of RSUs vest on 3rd anniversary of grant conditional on company performance - applies to grants since fiscal 2012
| |
| | | ➢ | Performance vesting requires company to attain defined adjusted average after-tax return on equity (‘‘ROE’’) levels over the vesting period | ➢
| Performance vesting awards depend on company’s achievement of ROE thresholds, thus further aligning executive with shareholder interests |
| | | ➢ | Vesting formula ranges between 0% of award for ROE <6% to 150% of award for ROE ≥ 18% | | |
Variable
| | Retention Awards - RSUs
| ➢ | Annual RSU grants to executives are based on retention needs | ➢ | Aligns executive with shareholder interests |
| | | ➢ | Grant amounts tend to be based on executive level | ➢ | Encourages retention by vesting 60% on 3rd anniversary, and 20% on each of 4th and 5th anniversaries of grant date
|
| | | | | |
Variable
| | Retirement Plan
Contributions —
| | | | |
| l | Profit Sharing Plan | ➢ | Contributions to Profit Sharing, ESOP and LTIP determined annually based on company performance | ➢ | Profit Sharing, ESOP and LTIP align executive with shareholder interests since they are funded based on company financial results |
| l | Employee Stock Ownership Plan (‘‘ESOP’’) | ➢
| Profit Sharing and ESOP are company-funded qualified retirement plans covering all associates
| | |
| l | Long Term Incentive
Plan (‘‘LTIP’’)
| ➢ | LTIP is a non-qualified, company-funded retention plan for highly compensated employees which relates to earnings in excess of qualified plan compensation limits | ➢ | LTIP encourages retention by vesting at end of five-year period |
| l | 401(k) Plan | ➢ | Modest matching of employee contributions into 401(k) Plan | ➢ | 401(k) facilitates tax-advantaged retirement savings |
Changes to our Compensation Practices for 2017
We made the following change to our compensation practices:
•Adjusted Return on Equity (ROE) Vesting Thresholds for Performance RSUs - We defer a portion of annual bonus amounts for our executive officers in the form of equity awards. Such equity awards take the form of RSUs, 50% of which vest only if the company achieves certain adjusted average after-tax ROE levels over a three-year measurement period. With respect to grants for fiscal 2017, we raised the adjusted ROE performance levels required for attaining the vesting percentages, which range from 0% to 150% of the target RSU grant. (For example, the adjusted ROE that the company must achieve in order for 100% of such RSUs to vest was increased from 11% to 12%. Similarly, the adjusted ROE required for threshold and maximum vesting levels was increased from 5% to 6%, and from 17% to 18%, respectively.) We adjust these performance targets periodically to reflect market conditions and to ensure that vesting of these awards to our executive officers remains a challenge but is reasonably attainable considering our Board’s commitment to maintaining conservative capital levels.
Our Compensation Practices
We describe below certain of our executive compensation practices that we believe serve to align our executives’ pay with company performance and their individual performance, promote good corporate governance, and serve our shareholders’ long-term interests. Following this information is a list of certain disfavored compensation practices that we avoid.
What We Do
þ Pay for performance. We award annual variable compensation based on the performance of the company and the individual. The great majority of our executive officers’ compensation is variable and not guaranteed. Base salaries for our named executive officers constitute — on average — approximately 7% of their total annual compensation.
þ Use deferred compensation. Variable compensation for our executive officers also includes a deferred component, in that a portion of annual bonuses (‘‘stock bonus awards’’) is delivered in the form of restricted stock units (‘‘RSUs’’).
þ Performance-based equity awards. The vesting of fifty percent (50%) of the RSUs awarded to our executive officers as stock bonus awards is tied to the achievement of defined adjusted average after-tax return on equity levels over a three-year measurement period. For more information regarding equity awards, see the section below entitled ‘‘Compensation Framework — Policies and Process.’’
þ Long vesting periods. Both the time-vesting and performance-vesting portions of our stock bonus awards generally vest on a cliff basis three years after the grant date. Both our outstanding legacy stock options and the retention RSUs with which we have replaced them generally vest 60% on the 3rd anniversary, and 20% on each of the 4th and 5th anniversaries, of their grant dates. In addition, each award under our LTIP,a non-qualified, company-funded retention plan for highly compensated employees, vests only at the end of a five-year period.
þ ‘‘Clawback’’ policy. We maintain a robust compensation recoupment (or ‘‘clawback’’) policy, which permits the company to recover compensation in the event of financial restatement, inaccurate performance measures and serious misconduct or materially imprudent judgment that results in material financial or reputational harm to the company.
þ Stock ownership guidelines. We maintain stock ownership requirements for our executive officers, creating a further link between management interests, company performance and shareholder value. All of our named executive officers have reached or exceeded the ownership requirements.
þ ‘‘Double triggers.’’ Our award agreements for RSUs issued since 2010 generally maintain the requirement of ‘‘double triggers’’ on the accelerated vesting of awards in the event of a change in control, meaning that an executive must actually be terminated following the change in control before vesting will be accelerated.
þ Modest perquisites. We provide very modest perquisites that provide a sound benefit to the company’s business.
What We Don’t Do
x No long-term employment agreements. Our executive officers, including our named executive officers, are employed by us on an ‘‘at will’’ basis and do not have any special arrangements for severance payments following termination.
x No dividends on unearned performance-based awards. We do not pay dividends or dividend equivalents on performance-based awards during the vesting period. Rather, dividends are deferred and will be paid based on performance achieved, with no premiums.
x No ‘‘gross ups.’’ We do not generally provide excise tax ‘‘gross ups,’’ other than in the case of certain relocation expenses, consistent with our relocation policy.
x No short selling or use of derivatives. Our insider trading policy prohibits our executive officers from short selling or dealing in publicly-traded options in our common stock.
x No pledging by insiders. Our directors and executive officers have no shares held in margin accounts or pledged to third parties. The company maintains a policy under which such individuals are prohibited from pledging our common stock, subject to any exception granted for a non-margin pledge upon special application.
x No option re-pricing. Our equity incentive plans contain certain provisions prohibiting option re-pricing absent approval of our shareholders.
x No option backdating or ‘‘spring-loading.’’ We do not backdate options or grant options retroactively. In addition, we do not coordinate grants of options so that they are made before announcement of favorable information, or after announcement of unfavorable information. Options for our stock are granted at fair market value on a fixed date or event, with all required approvals obtained in advance of or on the actual grant date.
2017 Compensation Decisions
In November 2017, our chairman and chief executive officer, Mr. Reilly, evaluated the individual performance of each executive officer, including the named executive officers, against previously-determined individual goals. After consultation with Mr. James, Mr. Reilly made recommendations to the Committee as to the amounts of annual bonus and retention restricted stock units to be awarded each named executive officer (other than himself). The Committee reviewed and discussed such recommendations, as well as certain market data provided by its compensation consultant, Pay Governance LLC, with respect to the compensation of the named executive officers. Similarly, Mr. James reviewed with the Committee the performance of Mr. Reilly and discussed his recommendations for Mr. Reilly’s compensation. The Committee evaluated the performance of Mr. Reilly and each of our other named executive officers in light of all the above information and approved the compensation of each, as further described below.
Target Compensation for 2017
The Committee sets annual compensation targets for our executive officers. The 2017 compensation targets were based upon historical compensation, financial industry surveys and fiscal 2017 budget projections. The fiscal year 2017 bonus targets were as follows:
|
| | | |
| Named Executive Officer | 2017 Bonus Target |
| Paul C. Reilly | $ | 7,000,000 |
|
| Jeffrey P. Julien | $ | 1,900,000 |
|
| John C. Carson, Jr. | $ | 2,600,000 |
|
| Jeffrey E. Trocin | $ | 2,800,000 |
|
| Dennis W. Zank | $ | 2,700,000 |
|
Upon setting the targets, the Committee also stipulated that annual bonuses would be funded from a pool equal to 6% of consolidated pre-tax income, with no individual bonus to exceed 3% of such measure.
Individual Performance for 2017
Set forth below is a summary of the material accomplishments for 2017 of each named executive officer, grouped by the areas of focus determined by the Committee at the beginning of the fiscal year, and which the Committee considered in exercising its discretion to award compensation for 2017. The Committee awarded each named executive officer an annual bonus in the amount indicated.
|
| |
Paul C. Reilly, Chairman and Chief Executive Officer — | 2017 Annual Bonus: $9,500,000 |
The Committee reviewed Mr. Reilly’s achievements during the course of fiscal 2017, including the facts that, with respect to financial performance: the company achieved record net revenues of $6.4 billion and pre-tax income of $925 million (adjusted pre-tax income: $1.1 billion(1)), once again ending the year with record client assets under administration ($693 billion); the company achieved a 14.5% pre-tax margin (adjusted pre-tax margin of 17.6%(1)); all four of the company’s core segments achieved record revenues and record pre-tax income; the company achieved a 12.2% return on equity (adjusted return on equity:14.5%(1)) while continuing to maintain conservative levels of capital and liquidity. In addition, the Committee reviewed Mr. Reilly’s leadership relating to strategic and operational matters, including the execution of an agreement to acquire the Scout/Reams business, which significantly enhanced the company’s Carillon Tower Advisers unit; the company having a very strong recruiting year in the Private Client Group segment while keeping regrettable attrition to less than 1%, helping contribute to a net addition of 200 advisors to reach a record 7,346 advisors; Raymond James Bank growing net loans 12% to a record $17.0 billion; the company proactively managing its liquidity and capital by successfully redeeming two higher-cost senior notes issues and conducting a re-opening of its offering of 30-year senior notes on attractive terms; significantly advancing compliance efforts in connection with the DOL’s Fiduciary Rule; overseeing the effective expansion of the Compliance and Supervision functions, including key leadership hires; and continuing to develop robust succession planning and leadership development for the top professionals at the firm.
|
| |
Jeffrey P. Julien, Chief Financial Officer — | 2017 Annual Bonus: $2,400,000 |
The Committee reviewed Mr. Julien’s achievements during the course of fiscal 2017, and noted that, with respect to financial performance: the company achieved record net revenues of $6.4 billion and pre-tax income of $925 million (adjusted pre-tax income: $1.1 billion(1)); the company generated a 12.2% return on equity (adjusted return on equity: 14.5%(1)) despite elevated legal/regulatory expenses; the company maintained a firm-wide ratio of compensation to net revenues below targeted limits; the company also maintained conservative levels of capital and liquidity throughout the fiscal year; the company further achieved an upgrade in its credit ratings from both S&P and Moody’s; and Raymond James Bank, where Mr. Julien serves as Chairman, exceeded budgeted revenues and pre-tax income, achieved net loan growth of 12%, and once again achieved a return on equity exceeding that of the overall firm. The Committee also noted Mr. Julien’s accomplishments of strategic and operational goals, including that he: materially contributed to the ongoing Alex. Brown integration effort, as well as the acquisition of Scout/Reams; continued improving the Company’s relationships and dialogue with analysts, investors, rating agencies and regulators; led capital and liquidity planning efforts, including redeeming two higher-cost senior notes issues and conducting an additional successful offering of senior notes at attractive rates; oversaw
a successful transition of leadership of the treasury function; continuously monitored the Company’s key financial metrics to ensure compliance with Board-approved tolerances; and continued as a valued advisor to the Chief Executive Officer.
|
| |
John C. Carson, Jr., President — | 2017 Annual Bonus: $2,650,000 |
The Committee reviewed Mr. Carson’s achievements during the course of fiscal 2017, and noted that, with respect to financial performance: despite market headwinds, the Fixed Income businesses generated net revenues and pre-tax income that were only marginally under targets; the Public Finance business, which exceeded goals in both total revenues and pre-tax income, continued to generate satisfactory results; Mr. Carson continued to drive expansion of the Public Finance business in California and the Midwest, and improved certain European business operations; under his leadership, the Fixed Income and Public Finance businesses generated satisfactory margins in view of the difficult market environment; and he successfully managed productivity and controlled expenses. The Committee also noted the following strategic/operational achievements: he successfully oversaw the company’s Corporate Development function, leading the negotiations for the agreement to acquire Scout/Reams; he continued to develop succession planning at several levels; and he successfully managed risks in the Fixed Income and Public Finance businesses.
|
| |
Jeffrey E. Trocin, Co-President, Global Equities and Investment Banking — | 2017 Annual Bonus: $3,500,000 |
The Committee reviewed Mr. Trocin’s achievements during the course of fiscal 2017, and noted that: under his leadership, the Equity Capital Markets (ECM) division exceeded its net revenue and pre-tax income targets, each a new record; ECM also exceeded its targets for revenue per banker, maintained a compensation ratio substantially below the targeted ceiling, and significantly increased the number of large M&A transactions advised, while expanding its overall market share; completed a number of key banker and other hires during the year; successfully reduced total research costs; and achieved orderly transitions in certain key leadership positions.
| Raymond James & Associates, Inc. |
| |
Dennis W. Zank, Chief Operating OfficerScott A. Curtis | | President — Private Client Group |
| 2017 Annual Bonus: $3,250,000 |
| Bella Loykhter Allaire | | EVP — Technology and Operations — Raymond James & Associates, Inc. |
The Committee reviewed Mr. Zank’s achievements during the course of fiscal 2017, and noted that he participated in leading the firm to achieve record net revenues of $6.4 billion and pre-tax income of $925 million (adjusted pre-tax income: $1.1 billion); stewarded the Private Client Group segment, generating record net revenues of $4.42 billion and pre-tax income of $373 million; and led work on expense efficiencies and cost containment measures across multiple businesses. Further, Mr. Zank accomplished the following strategic and/or operational objectives: he continued his significant involvement in the Private Client Group’s financial advisor recruiting process, leading the company to increase its net advisor count by 200 to a record 7,346 advisors; he continued making strong contributions to financial advisor retention, including continuing to lead the successful integration of the Alex. Brown leadership and advisors; he developed long-term growth strategies for the Private Client Group business and continued to mentor senior leaders and augment succession plans for core business functions within the company. Notwithstanding the above achievements, the Committee noted that Mr. Zank oversaw the business that experienced a $150 million legal settlement during the year, and - in view of such development - determined to marginally reduce the proposed amount of his 2017 bonus.
________________
(1) Adjusted pre-tax income, adjusted pre-tax margin, and adjusted return on equity are non-GAAP measures. Please refer to page 40Objectives of our Annual Report on Form 10-K for the fiscal year ending September 30, 2016, filed with the SEC on November 22, 2016, for reconciliations of these measures to the most directly comparable GAAP measures and other required disclosures.
31
Annual Direct Compensation for 2017Program
After assessing the company’s financial and strategic performance for fiscal 2017, and after further evaluating the individual performance of our named executive officers, as described above, the Committee exercised its discretion to award annual direct compensation for 2017 to our NEOs as set forth in the following table.
The table below depicts how the Committee viewed its compensation decisions for our NEOs, but the presentation therein differs substantially from the Summary Compensation Table (‘‘SCT’’) on page 39 that is required by SEC rules. The table below is not a substitute for the information presented in the SCT.
There are two principal differences between the SCT and our Annual Direct Compensation Table:
The company grants both the cash and equity components of annual bonus after our earnings for a performance year have been announced. In both the Annual Direct Compensation Table and the SCT, cash incentive compensation granted in fiscal 2018 for fiscal 2017 performance is shown as 2017 compensation. Our presentation below treats equity awards similarly, so that equity awards granted in fiscal 2018 for performance in 2017 are shown as 2017 compensation. The SCT does not follow this treatment, however, and instead reports the value of equity awards in the year in which they are granted, rather than the year in which they were earned. As a result, equity awards granted in fiscal 2018 for 2017 performance are shown in our presentation below as 2017 compensation, but the SCT reports as 2017 compensation the value of equity awards granted in 2017 in respect of 2016 performance.
The SCT reports ‘‘All Other Compensation.’’ These amounts are not part of the Committee’s compensation determinations and are not shown in the presentation below.
|
| | | | | | | | | | | | | | | | |
Name |
Year | Annual Direct Compensation |
Salary | Incentive Compensation |
Total |
Cash Bonus | Time Vesting Stock Bonus Awards(1)(2) | Performance Vesting Stock Bonus Awards(1)(2)(3) | Time Vesting Stock Retention Awards(2)(4) |
| Paul C. Reilly | 2017 | $ | 486,250 |
| $5,700,056 | $ | 1,900,015 |
| $ | 1,899,929 |
| (5) | $ | 1,103,750 |
| $11,090,000 |
| Chairman and Chief | 2016 | $ | 445,000 |
| $4,575,034 | $ | 1,337,519 |
| $ | 1,337,447 |
| (6) | $ | 719,400 |
| $8,414,400 |
| Executive Officer - RJF | 2015 | $ | 445,000 |
| $4,325,030 | $ | 1,212,514 |
| $ | 1,212,456 |
| (7) | $ | 573,000 |
| $7,768,000 |
| Jeffrey P. Julien | 2017 | $ | 280,000 |
| $2,000,070 | $ | 199,965 |
| $ | 199,965 |
| (5) | $ | 441,500 |
| $3,121,500 |
| Executive VP, Finance | 2016 | $ | 280,000 |
| $1,737,554 | $ | 156,259 |
| $ | 156,187 |
| (6) | $ | 359,700 |
| $2,689,700 |
| Chief Financial Officer and Treasurer - RJF | 2015 | $ | 278,750 |
| $1,580,056 | $ | 135,001 |
| $ | 134,943 |
| (7) | $ | 286,500 |
| $2,415,250 |
| John C. Carson, Jr. | 2017 | $ | 300,000 |
| $2,187,516 | $ | 231,242 |
| $ | 231,242 |
| (5) | $ | 441,500 |
| $3,391,500 |
| President-RJF | 2016 | $ | 300,000 |
| $2,375,028 | $ | 262,486 |
| $ | 262,486 |
| (6) | $ | 359,700 |
| $3,559,700 |
| | 2015 | $ | 300,000 |
| $2,150,016 | $ | 225,021 |
| $ | 224,963 |
| (7) | $ | 286,500 |
| $3,186,500 |
| Jeffrey E. Trocin | 2017 | $ | 305,000 |
| $2,700,053 | $ | 400,017 |
| $ | 399,930 |
| (5) | $ | 441,500 |
| $4,246,500 |
| Co-President, Global Equities | 2016 | $ | 305,000 |
| $1,620,000 | $ | 140,017 |
| $ | 139,944 |
| (6) | $ | 359,700 |
| $2,564,661 |
| and Investment Banking, RJA | 2015 | $ | 305,000 |
| $2,337,506 | $ | 256,247 |
| $ | 256,247 |
| (7) | $ | 286,500 |
| $3,441,500 |
| Dennis W. Zank | 2017 | $ | 330,000 |
| $2,575,074 | $ | 337,463 |
| $ | 337,463 |
| (5) | $ | 441,500 |
| $4,021,500 |
| Chief Operating Officer - RJF | 2016 | $ | 330,000 |
| $2,450,012 | $ | 275,030 |
| $ | 274,958 |
| (6) | $ | 359,700 |
| $3,689,700 |
| 2015 | $ | 330,000 |
| $2,300,044 | $ | 249,978 |
| $ | 249,978 |
| (7) | $ | 286,500 |
| $3,416,500 |
__________________
| |
(1) | Represents the applicable portion of any annual bonus that exceeds $275,000 for each NEO that is delivered in the form of restricted stock units (‘‘RSUs’’). Each RSU vests, if at all, on the third anniversary of the grant date. The proportion delivered in RSUs varies with the size of the annual bonus according to the formula presented on page 38 hereof. |
| |
(2) | Each RSU represents a contingent right to receive (i) one share of common stock and (ii) non-preferential dividend equivalents equal to the sum of any dividends on the shares of common stock underlying the RSU that were actually paid during the vesting period. |
| |
(3) | Represents 50% of the aggregate number of RSUs delivered as annual bonus, computed as described in footnote (1) to this table. RSUs reported in this column vest, if at all, contingent upon the company achieving certain defined adjusted average after-tax return on equity (‘‘ROE’’) levels over a 3-year measurement period, in accordance with the formula presented in footnote (16) to the Outstanding Equity Awards at Fiscal Year End for 2017 table. |
| |
(4) | Stock retention awards delivered in the form of RSUs. The RSUs vest 60% on the third, and 20% on each of the fourth and fifth anniversaries of the grant date. |
| |
(5) | RSUs granted in fiscal year 2018 vest contingent upon the company achieving ROE over a vesting period consisting of fiscal years 2018 - 2020, as explained in footnote (3) above. The following amounts represent the maximum value at the grant date of the RSUs granted in fiscal year 2018 for fiscal year 2017 performance: Mr. Reilly $2,849,894, Mr. Julien $299,948, Mr. Carson $346,863, Mr. Trocin $599,895 and Mr. Zank $506,195. |
| |
(6) | RSUs granted in fiscal year 2017 vest contingent upon the Company achieving ROE over a vesting period consisting of fiscal years 2017 - 2019, as explained in footnote (3) above. The following amounts represent the maximum value at the grant date of the RSUs granted in fiscal year 2017 for fiscal year 2016 performance: Mr. Reilly $2,006,171, Mr. Julien $234,281, Mr. Carson $393,729, Mr. Trocin $209,916 and Mr. Zank $412,437. |
| |
(7) | RSUs granted in fiscal year 2016 vest contingent upon the company achieving ROE over a vesting period consisting of fiscal years 2016 - 2018, as explained in footnote (3) above. The following amounts represent the maximum value at the grant date of the RSUs granted in fiscal year 2016 for fiscal year 2015 performance: Mr. Reilly $1,818,683, Mr. Julien $202,415, Mr. Carson $337,445, Mr. Trocin $384,370 and Mr. Zank $374,967. |
Alignment of CEO Compensation with Total Shareholder Return
As noted above, the compensation of our chief executive officer is heavily weighted to variable incentive compensation that is linked to performance, and a significant portion of the annual bonus for our chief executive officer is delivered in the form of restricted stock units. The following graph shows the total shareholder return on $100 invested in the company’s stock on September 30, 2012, compared to total annual direct compensation of our chief executive officer for each year represented. We believe the graph demonstrates that our chief executive officer’s total compensation has generally correlated well to total shareholder return over the time periods indicated. (As previously disclosed, in making its 2015 compensation decisions, the Committee had determined that, in light of the company’s record performance over recent years, an upward adjustment was appropriate in order to better align our chief executive officer’s compensation with that of the companies constituting the Corporate Peers group.)
No Long-Term Employment Agreements for Executive Officers
Our executive officers, including our named executive officers, are employed by us on an ‘‘at will’’ basis and do not have any special arrangements for severance payments following termination.
Compensation Recoupment Policy
Our Board maintains a Compensation Recoupment Policy that is intended to reduce potential risks associated with our compensation plans, and thus better align the long-term interests of our named executive officers and our shareholders. The policy contains three triggers that could result in “clawback” of compensation: (i) instances of financial statement restatement, (ii) discovery of a materially inaccurate performance measure that resulted in inappropriate award or vesting of incentive compensation, and (iii) serious misconduct or materially imprudent judgment that caused the company material financial or reputational harm. (Incentive compensation is defined to include any compensation other than base salary, and
it thus includes cash, shares of stock, restricted shares, restricted stock units and stock options.) The third trigger gives the Committee authority to require forfeiture of the employee’s unvested incentive compensation awards and/or reimbursement of the most recently-received annual bonus. It applies to all executive officers and to any other employee whose annual incentive compensation exceeds 50% of total annual compensation, with the exception of Private Client Group financial advisors and branch managers.
Stock Ownership Policy
The Committee maintains a Directors and Executive Officers Stock Ownership Policy that stipulates the ownership levels that our non-executive directors and executive officers are expected to attain within five years of the policy’s adoption (February 2015). Under the policy, directors are required to own shares of our common stock with a value equal to five times their annual retainer. Our chief executive officer is required to own shares equal to six times annual salary, while other executive officers must own three times their respective annual salaries. (All calculations are based on the weighted average of the stock’s NYSE closing prices on the date of each grant or other acquisition during the accumulation period.) Shares owned directly or jointly with family members, and indirectly (including shares held in a retirement plan), as well as unvested restricted stock and RSUs, the vesting of which is solely time-based, are counted towards satisfaction of this requirement. Until the applicable ownership level is achieved, each individual is required to retain 100% of the net (after deductions for taxes or option exercise price) shares obtained through the company’s share incentive plans.
Succession Planning
The Board believes that effective management succession planning, particularly for the chief executive officer role, is important for the continued success of the company. Among the responsibilities described in the Committee’s charter is the review of succession planning for the CEO and other senior management positions. Consequently, our chief executive officer and chief human resources officer make detailed presentations to the Committee annually on senior management succession plans and individual development plans for identified successors. This information is compiled through a twice-yearly organization-wide process designed to identify potential successors, evaluate the “readiness” of internal candidates and identify situations where the firm may need to consider external talent. The Committee discusses the development plans of succession candidates, particularly for the CEO role, monitors such candidates’ progress, and reports its conclusions to the full Board. High potential leaders are also given exposure to Board members through formal presentations and informal events, which provide directors with opportunities to personally assess the candidates’ skills and leadership capabilities.
Use of Compensation Consultants
The Committee engaged a compensation consultant, Pay Governance LLC, to provide certain market data in connection with its 2017 compensation determinations for our executive officers, including our chief executive officer. The Committee uses such data as reference material to assist it in maintaining a general awareness of industry compensation standards and trends. The market data does not formulaically determine the Committee’s compensation decisions for any particular executive officer. The Committee does not target a particular percentile of the peer groups with respect to total pay packages or any individual component of pay. (For more information, please see the section above entitled “Summary of Compensation Decisions for 2017.”)
Consideration of Prior ‘‘Say-on-Pay’’ Vote
We hold an advisory vote of our shareholders on executive compensation annually. At the 2017 annual shareholders meeting, 96.65% of the votes cast were in favor of the advisory proposal to approve our named executive officers’ compensation (the ‘‘Say-on-Pay’’ proposal). We believe that the 2017 vote approving the Say-on-Pay proposal conveyed our shareholders’ strong support of the Committee’s decisions and our existing executive compensation programs. Based on this feedback, the Committee determined to continue our current compensation practices as described herein.
Compensation Framework — Policies and Process
Policies and Goals. The company competescompete for talent with other large financial services firms throughout the country, and our ability to sustain or improve our position in this highly competitive environment depends substantially on our ability to continue to attract and retain the most qualified employees. We thus strive to maintain compensation policies that enable us to attract, motivate and retain high-quality executive officers and ensure that their individual interests are aligned with those of our shareholders. Our overall aimgoal is to utilize our compensation programs to reward executive officers for the achievement of short-termnear-term and long-term strategic and operational goals, and increased total shareholder return, while at the same time avoiding the encouragement of unnecessary or excessive risk-
taking. In support of our recruitment and retention objectives, werisk-taking. We therefore structure our incentive awards to include vesting, deferred payment, and cancellation and clawbackclaw-back provisions that protect the company and ensure that the executive’s individual interests are aligned with those of our shareholders. The named executive officers participate on the same basis as other employees in health and welfare, and paid time-off benefits.
company.Our executive compensation program emphasizes discretionary variable annual performance compensation and long-term incentive compensation, a portion of which will be received by the executive only upon our attainment of specific financial targets. VariableWe adjust dollar amounts of annual performance compensation and long-term incentive compensation are adjusted year-over-yeargrants to appropriately reward annual achievement of the company’s financial and strategic objectives. In addition, a portion of long-term incentive compensation serves shareholders’ interests by conditioning vesting upon future performance that executes on the Company’s long-term business strategy. The structureOur NEOs participate on the same basis as other employees in health and welfare, and paidtime-off benefits.
Use of our compensation program balances the objectives of delivering returns for shareholders and providing appropriate rewards to motivate superior individual performance.
The company deliversEquity CompensationWe deliver a substantial portion of incentive compensation in the form of equity awards — generally RSUs — a portion of which will vest based on future return on equity (“ROE”) performance and are subject to further aligncancellation and claw-back over a multi-year period. The Committee believes that delivering equity aligns employee interests with those of shareholders. The committee believes that linking compensation amounts to performanceshareholders and delivering annual and long-term incentives partially in the form of deferred equity awards that are affected, up or down, by future return on equity performance, and that are subject to cancellation and clawback over a multi-year period, helps motivate executives to achieve financial and strategic goals within the bounds of the company’sCompany’s risk tolerance levels. Where an executive officer’s
Awards to CEO. The annual bonus exceedsfor our CEO is delivered 50% in cash and 50% in the amountform of RSUs. 60% of the portion paid in RSUs will vest on the third anniversary of the grant only if the company attains certain defined
Raymond James Financial, Inc. 2020 Proxy Statement | 19
adjusted averageafter-tax ROE(1) levels over a3-year measurement period (“performance RSUs”). The remaining 40% of the portion paid in RSUs will vest on the third anniversary of grant.
Awards to Other Executive Officers. Where the annual bonus of one of our other executive officers (including NEOs) exceeds $275,000, a variable portion of the bonusamount over $250,000 is similarly delivered in the form of restricted stock units (‘‘RSUs’’). These RSUs vest over a three-year period.RSUs. The proportion of bonus delivered in RSUs increases with the size of the bonus. Specifically, for each segment of bonus according tothat falls within the dollar parameters set forth in the following formula:
|
| |
Portion of Annual Bonus | Portion in RSUs |
$250,000 - $500,000 | 10% |
$500,001 - $1,000,000 | 15% |
$1,000,001 - $2,000,000 | 20% |
$2,000,001 - $3,000,000 | 25% |
Above $3,000,000 | 50% |
One-half oftable, the indicated percentage is delivered in RSUs, with the balance delivered in cash: | | | | | | | | | | |
| Segment of Annual Bonus | | Portion in RSUs | | Portion in Cash |
| | | |
| $250,000 – $500,000 | | 10% | | 90% |
| | | |
| $500,001 – $1,000,000 | | 15% | | 85% |
| | | |
| $1,000,001 – $2,000,000 | | 20% | | 80% |
| | | |
| $2,000,001 – $3,000,000 | | 25% | | 75% |
| | | |
| Above $3,000,000 | | 50% | | 50% |
Of the RSUs delivered to such other executive officers, 50% are performance RSUs that will vest on the 3rd anniversary of grant. The other half vests on the 3rd third anniversary of the grant only if the company attains certain defined adjusted average after-tax returnROE levels. The remaining 50% of these RSUs vest on equity (‘‘ROE’’) levels over the 3-year measurement period.third anniversary of grant.
Performance RSU Vesting Based on ROE. The Committee has chosen ROE because it believes it is an appropriate indicator of the return the company is delivering on shareholders’ equity, since it reflects both bottom-line profitability and the manner in which the company is managing shareholders’ equity to generate such profitability. The Committee believes that ROE is particularly relevant for the financial services industry in light of the capital-intensive nature of many of our businesses, making it a useful measure of relative performance across many financial services firms. Commencing withThe Committee uses adjusted ROE(1) as presented in our quarterly earnings releases, which excludes certain material items that are not indicative of our core operating results.
The Committee determines the appropriate ROE vesting scale for the grant of each year’s performance RSUs. The performance RSUs will vest — if at all — in an amount that falls between 50% and 150% of the stated target for the award, depending on the company’s ROE for the applicable measurement period. The Committee may adjust the vesting scale for a particular year of grants in order to reflect equity, interest rate and credit market conditions, and to ensure that vesting of these awards remains a challenge but is reasonably attainable considering our Board’s commitment to maintaining conservative capital levels.
(1) Adjusted ROE is anon-GAAP measure. Please refer to Appendix B for a reconciliation of this measure to the most directly comparable GAAP measure and other required disclosures.
20 | Raymond James Financial, Inc. 2020 Proxy Statement
For grants made in respect of fiscal 20172019 performance, the Committee determined the following vesting formula is as follows (with results to be interpolated as necessary):
Our Compensation Practices
What We Do
Pay for performance.We award annual variable compensation based on the performance of the company and the individual. The great majority of our executive officers’ compensation is variable and not guaranteed.
Use deferred compensation.Variable compensation for our executive officers also includes a deferred component, in that a portion of annual bonuses (“stock bonus awards”) is delivered in the form of RSUs.
Performance-based equity awards.The vesting of sixty percent (60%) for our CEO, and fifty percent (50%) for our other NEOs, of the RSUs awarded to our executive officers as stock bonus awards is tied to the achievement of defined adjusted ROE(1) levels over a three-year measurement period (“performance vesting”).
Long vesting periods.Both the time-vesting and performance-vesting portions of our stock bonus awards generally vest on a cliff basis three years after the grant date. Both our outstanding legacy stock options and the retention RSUs with which we have replaced them generally vest 60% on the 3rd anniversary, and 20% on each of the 4th and 5th anniversaries, of their grant dates. In addition, each award under our Long-Term Incentive Plan (“LTIP”), anon-qualified retention plan for highly compensated employees, cliff vests at the end of a five-year period.
“Claw-back” policy.We maintain a robust compensation recoupment policy, which permits the company to recover compensation in the event of a financial restatement, inaccurate performance measures, and serious misconduct or materially imprudent judgment that results in material financial or reputational harm to the company.
Stock ownership guidelines.We maintain stock ownership requirements for our executive officers, creating a further link between management interests, company performance and shareholder value. All of our NEOs have reached or exceeded the ownership requirements.
(1) Adjusted ROE is anon-GAAP measure. Please refer to Appendix B for a reconciliation of this measure to the most directly comparable GAAP measure and other required disclosures.
Raymond James Financial, Inc. 2020 Proxy Statement | 21
“Double triggers.”Our award agreements for RSUs generally maintain the requirement of “double triggers” on the accelerated vesting of awards in the event of a change in control, meaning that an executive must actually be terminated following the change in control before vesting will be accelerated.
Limited perquisites.We provide very limited perquisites that provide a demonstrable benefit to the company’s business.
What We Don’t Do
No long-term employment agreements.Our executive officers, including our CEO and other NEOs, are employed by us on an “at will” basis and do not have any special arrangements for severance payments following termination.
No dividends on unearned performance-based awards.We do not pay dividends or dividend equivalents on performance-based awards during the vesting period. Rather, dividends are deferred and paid only based on performance achieved, with no premiums.
No “gross ups.”We do not generally provide excise tax “gross ups,” other than in the case of certain relocation expenses, consistent with our relocation policy.
No pledging by insiders.The company maintains a policy under which our directors and executive officers are prohibited from pledging our common stock, subject to any exception granted for anon-margin pledge upon special application.
No short selling or hedging by insiders.Our directors and executive officers are generally prohibited from engaging in short sales, transacting in publicly traded or private options and engaging in hedging or monetization transactions with respect to our common stock.
No optionre-pricing.Our equity incentive plans contain certain provisions prohibiting optionre-pricing absent approval of our shareholders.
No option backdating or “spring-loading.”We do not backdate options or grant options retroactively. In addition, we do not coordinate grants of options so that they are made before announcement of favorable information, or after announcement of unfavorable information. Options for our stock are granted at fair market value on a fixed date or event, with all required approvals obtained in advance of or on the actual grant date.
Consideration of Prior “Say on Pay” Vote
We hold an advisory vote of our shareholders on executive compensation annually. At the 2019 annual shareholders meeting, 96.46% of the votes cast were in favor of the advisory proposal to approve our NEOs’ compensation (the “Say-on-Pay” proposal). We believe that the 2019 vote approving theSay-on-Pay proposal conveyed our shareholders’ strong support of the Committee’s decisions and our existing executive compensation programs. Based on this feedback, the Committee determined to continue our current compensation practices as described herein.
22 | Raymond James Financial, Inc. 2020 Proxy Statement
Elements of Compensation
The Committee utilizes the following balanced mix of compensation elements for executive officers, with total compensation weighted heavily towards variable elements that reward longer-term performance.
| | | | | | | | |
| | |
| Type | | Pay Element & Purpose | | How Amount Is Determined |
| | | | Base Salary - Provides base level of pay | | ➣ | | Internal and external market factors |
| | | ➣ | | Reviewed annually, with adjustments - if any - effective at beginning of calendar year |
| | | | Annual Bonus - Cash Provides competitive incentive opportunity | | ➣ | | Based on company’s annual financial results and progress against strategic objectives |
| | | ➣ | | Funded from a pool not exceeding 6% of consolidatedpre-tax income, with no individual bonus exceeding 3% |
| | | ➣ | | For CEO, bonus is delivered 50% in cash and 50% in equity awards |
| | | ➣ | | For other NEOs, a variable portion of bonus is delivered in equity awards |
| | | | Annual Bonus - Equity Aligns executive with shareholder interests | | ➣ | | For CEO, 50% of bonus delivered in RSUs, with 60% of RSUs performance-vesting and 40% time-vesting |
| | | Encourages retention by vesting at end of3-year period | | ➣ | | For other NEOs, a variable portion of bonus is delivered in RSUs, with equity proportion increasing with size of bonus |
| | | | | ➣ | | For other NEOs, 50% of RSUs vest on 3rd anniversary of grant, and remaining 50% vest on 3rd anniversary of grant conditional on company performance |
| | | Performance vesting awards depend on company’s achievement of ROE thresholds, thus further aligning executive with long-term shareholder interests | | ➣ | | Performance vesting requires company to attain defined adjusted(non-GAAP) averageafter-tax return on equity levels over a three-year vesting period (“ROE”) |
| | | ➣ | | Depending on ROE achieved, performance vesting RSUs may vest from 0% to 150% of stated target amount |
| | | | Retention Awards - RSUs Aligns executive with shareholder interests | | ➣ | | Annual time-vesting RSU grants to executives are driven by retention needs |
| | | Encourages retention by longer vesting period | | ➣ | | Vests 60% on 3rd anniversary, and 20% on each of 4th and 5th anniversaries of grant |
| | | | Retirement Plan Contributions -Profit Sharing, ESOP and LTIP align executive with shareholder interests since contributions are based on company financial results | | | | |
| ☐ | | Profit Sharing Plan | | ➣ | | Contributions to Profit Sharing, ESOP and LTIP determined annually based on company performance |
| ☐ | | Employee Stock Ownership Plan (ESOP) | | ➣ | | Profit Sharing and ESOP are qualified retirement plans covering all associates |
| ☐ | | Long Term Incentive Plan (LTIP) -encourages retention by vesting at end of five-year period | | ➣ | | LTIP is anon-qualified retention plan for highly compensated employees which relates to earnings in excess of qualified plan compensation limits |
| ☐ | | 401(k) Plan -facilitatestax-advantaged retirement savings | | ➣ | | Modest matching of employee contributions into 401(k) Plan |
Fiscal 2019 Company Performance Highlights
Strategic Execution.The firm successfully executed several strategic initiatives during fiscal 2019. In the Private Client Group segment, fiscal 2019 was a very strong year for financial advisor recruiting, and retention of advisors remained excellent. In the Capital Markets segment, we continued to make significant investments to expand and strengthen our M&A platform, both in the U.S. and Europe including the acquisition of Silver Lane Advisors, which has extensive expertise and relationships in the asset and wealth management sectors. The Asset Management segment continued to benefit from increased utilization offee-based accounts by our Private Client Group clients and
Raymond James Financial, Inc. 2020 Proxy Statement | 23
purchased the remaining 55% of ClariVest Asset Management. Raymond James Bank continued to utilize its lending solutions to better serve clients in the Private Client Group and Capital Markets segments while maintaining strong credit metrics. Finally, we continued investing in technology and our risk management infrastructure to strengthen our relationships with our advisors and clients and to remain compliant with regulatory requirements. Most importantly, we successfully implemented these strategic initiatives while maintaining our unique, client-focused culture.
Financial Performance.Our company generated strong financial results in fiscal 2019. We achieved record annual net revenues of $7.74 billion and record net income of $1.03 billion, or $7.17 per diluted share. On anon-GAAP basis, adjusted net income was $1.07 billion, (1) or $7.40 per diluted share. (1) Our other financial accomplishments during the year included:
Net revenues increased 6% and earnings per diluted share increased 25% compared to fiscal 2018,
| • | | Adjusted earnings per diluted share of $7.40(1) increased 14% compared to adjusted diluted earnings per share of $6.47(1) in fiscal 2018, |
| • | | Our ROE for the fiscal year was 16.2%, or 16.7%(1) on an adjusted basis, which is very strong particularly given our prudent capital position throughout fiscal 2019, |
Repurchased 9.83 million common shares for $752 million, at an average price of approximately $76.50 per share under the Board’s repurchase authorization, and
The ratio of the firm’s total capital to risk-weighted assets remained above 20% throughout the year, well above regulatory requirements.
The firm’s solid performance in fiscal 2019 was driven by record annual net revenues for all four of our core segment and recordpre-tax income in our Private Client Group segment, Asset Management segment and Raymond James Bank.
Private Client Group — Record net revenues of $5.36 billion increased 5% and recordpre-tax income of $579 million increased 1% over fiscal 2018. Record net revenues were driven by strong growth in assets infee-based accounts, a significant net increase in the number of financial advisors to a record of more than 8,000, and the benefit derived from higher short-term interest rates. Private Client Group assets under administration ended the fiscal year at a record $798.4 billion, representing 6% growth over September 30, 2018.
(1) Adjusted net income, adjusted earnings per diluted share, and adjusted ROE arenon-GAAP measures. Please refer to Appendix B for reconciliations of these measures to the most directly comparable GAAP measures and other required disclosures.
24 | Raymond James Financial, Inc. 2020 Proxy Statement
Capital Markets — Record net revenues of $1.08 billion increased 12% andpre-tax income of $110 million increased 21% over fiscal 2018, respectively. Results in the Capital Markets segment were helped by strong investment banking revenues of $564 million, which were up 21% over fiscal 2018. Additionally, increased rate volatility during the second half of the year helped boost fixed income results, while equity brokerage revenues declined due to continued structural and cyclical factors.
Asset Management — Record net revenues of $691 million increased 6% and recordpre-tax income of $253 million increased 8% over fiscal 2018. Record net revenues were driven by growth in financial assets under management, which grew 2% to $143.1 billion at the end of the fiscal year. The annual growth in financial assets under management was attributable to strong net inflows infee-based accounts in the Private Client Group and equity market appreciation, which more than offset net outflows for Carillon Tower Advisers.
Raymond James Bank — Record net revenues of $846 million increased 16% and recordpre-tax income of $515 million increased 5% over fiscal 2018. Record results were driven by robust loan growth with a focus on lending to clients of the Private Client Group and Capital Markets segments. Net loans at Raymond James Bank finished the year at a record $20.9 billion, reflecting 7% growth for the year. The increase in short-term interest rates helped the Bank’s net interest margin increase by 10 basis points to 3.32% in fiscal 2019 from 3.22% in fiscal 2018. Credit metrics remained strong throughout the year with nonperforming assets of 0.18% of total assets and criticized loans of 1.36% of total loans.
Use of Compensation Consultants
In making compensation decisions, the Committee considers numerous factors of company and individual performance, as well as market data regarding compensation levels for comparable industry positions. The Committee does not attempt to rank or assign relative weight to any particular factor, however. The Committee does not rely on any factor as a substitute for its own judgment, but rather applies its independent discretion to consider them in their entirety. Although the Committee did not “benchmark” compensation against a peer group, it did engage an outside compensation consultant, Pay Governance LLC, to provide market data in connection with its 2019 compensation determinations for executive officers, including our NEOs. The Committee uses such data as a reference to assist it in maintaining a general awareness of industry compensation standards and trends. The market data does not formulaically determine the Committee’s compensation decisions for any particular executive officer, however. Similarly, the Committee does not target a particular percentile of any peer group with respect to total pay packages or any individual component of pay.
Peer Group Comparisons
For 2019, the Committee used the following peer groups for the indicated NEOs:
| | | | |
Peer Group for Mr. Reilly — Chairman and CEO, and Mr. Julien,* — CFO |
| | |
Affiliated Managers Group | | Invesco Ltd. | | State Street Corp. |
| | |
Ameriprise Financial Inc. | | Jefferies Financial Group | | Stifel Financial Corp. |
| | |
Charles Schwab Corp. | | Lazard Ltd. | | T. Rowe Price Group Inc. |
| | |
E*TRADE Financial Corp. | | Legg Mason, Inc. | | TD Ameritrade Holding Corp. |
| | |
Edward Jones | | LPL Financial Holdings Inc. | | |
| | |
Franklin Resources Inc. | | Northern Trust Corp. | | |
| * | Peer group used for Mr. Julien excluded T. Rowe Price Group, Inc. |
Raymond James Financial, Inc. 2020 Proxy Statement | 25
| | |
Peer Group for Mr. Bunn |
Head of Investment Banking Role | | Head of Equities Role |
| |
Jefferies | | KeyCorp. |
| |
JMP Securities | | Cowen and Company |
| |
Moelis & Company Group LP | | JMP Securities |
| |
Nomura Securities | | Leerink Partners |
| |
Robert W. Baird & Co. | | Nomura Securities |
| |
William Blair & Company | | Piper Jaffray |
| |
| | SunTrust Bank |
| |
| | William Blair & Company |
| | | | |
Peer Group for Mr. Curtis — President — Private Client Group |
| | |
Bank of America Merrill Lynch* | | Morgan Stanley* | | TD Securities |
| | |
Comerica | | PNC Bank | | U.S. Bancorp |
| | |
E-Trade | | Regions Financial Corporation | | UBS Wealth Management US* |
| | |
Fifth Third Bank | | Robert W. Baird & Co. | | Wells Fargo Bank* |
| | |
Franklin Templeton Investments | | SunTrust Banks | | |
| | |
LPL Financial Services | | Synovus Financial | | |
| * | Compared Head of Brokerage role |
| | | | |
Peer Group for Ms. Loykhter Allaire — EVP Technology and Operations |
| | |
Branch Banking & Trust Co. | | Franklin Templeton | | SunTrust Bank |
| | |
Citizens Financial Group | | Invesco Ltd. | | TD Ameritrade Holding Corp. |
| | |
Comerica | | Legg Mason & Co. | | William Blair & Company |
| | |
Fidelity Investments | | LPL Financial Services | | |
| | |
Fifth Third Bank | | Royal Bank of Canada | | |
Changes to our Compensation Practices for 2019
We made no significant changes to our compensation practices for 2019.
2019 Compensation Decisions
In November 2019, our chairman and chief executive officer, Mr. Reilly, evaluated the performance of the company and the individual performance of each executive officer, including the NEOs, against previously-determined individual goals. Mr. Reilly made recommendations to the Committee as to the amounts of annual bonus and retention RSUs to be awarded each executive officer (other than himself). The Committee reviewed and discussed such recommendations, as well as market data provided by its compensation consultant. The Committee evaluated the performance of Mr. Reilly and each of our other NEOs in light of all the above information. It then reviewed such information with the other non-executive directors and approved the compensation described below.
26 | Raymond James Financial, Inc. 2020 Proxy Statement
Target Compensation for 2019
The Committee sets annual compensation targets for our executive officers. The 2019 compensation targets were based upon historical compensation, financial industry surveys and fiscal 2019 budget projections. In setting these targets, the Committee also stipulated that annual bonuses would be funded from a pool equal to 6% of consolidatedpre-tax income, with no individual bonus to exceed 3% of such measure.
Individual Performance for 2019
Set forth below is a summary of the material accomplishments of each NEO for fiscal 2019, grouped by the areas of focus determined by the Committee at the beginning of the fiscal year, which the Committee considered in exercising its discretion to award compensation for 2019. The Committee awarded each named executive officer the bonus and other compensation in the amounts indicated.
Paul C. Reilly,Chairman and CEO
2019 Contributions include:
Provided strong leadership that resulted in achievingrecord revenue andpre-tax income
Deliveredstrong ROEresult
|
| |
| Adjusted 3-Year Average After-Tax ROE | RSU Vesting Percentage |
| ≥18% | 150% |
| 15% | 125% |
| 12% | 100% |
| 9% | 75% |
| 6% | 50% |
| <6% | 0% |
Solidperformance versus market peers
Outpaced Financial Advisorrecruiting and retention results
Solid progress on the continuing build out of the firm’sCompliance and Supervision functions
Continued to invest in thedevelopment of key leaders for strong succession planning and executed several leadership changes during the year
Strong leadership of the firm’sdiversity and inclusion strategy and initiatives
Compensation:The Committee approved an annual bonus for 2019 of $11,750,000.
Jeffrey P. Julien,Executive Vice President, Finance and CFO
2019 Contributions include:
| • | | Supported the company in achievingrecord net revenues of $7.74 billion,recordpre-tax income of $1.375 million, return on equity of 16.2%, and an adjusted return on equity of 16.7%(1) |
As its Chairman, ledRaymond James Bank to asset growth of 11% and record bank net revenues andpre-tax income, all while maintaining strong credit discipline
Oversaw the firm’sshare repurchase program, which resulted in returning approximately $945 million to shareholders through a combination of dividends and share repurchases
Successfullyprepared his successor as he plans to step down as CFO in December 2019
Compensation:Mr. Reilly recommended, and the Committee approved, an annual bonus for 2019 of $2,950,000.
James E. Bunn,President of Global Equities and Investment Banking
2019 Contributions include:
Led Global Equities and Investment Banking business unit torecord annualnet-revenues, including record Investment Banking revenues
Responsible for significantgrowth in Investment Banking revenues, including record M&A results
Maintainedcost discipline within the Equity Research business
Activelypursued attractive acquisition opportunities to strengthen the firm’s investment banking franchise; acquired Silver Lane, an investment banking boutique focused on the wealth and asset management industry
Successfully sold the operations related to research, sales and trading of European equities
Compensation:Mr. Reilly recommended, and the Committee approved, an annual bonus for 2019 of $4,300,000.
(1)Adjusted net income, adjusted earnings per diluted share, and adjusted ROE arenon-GAAP measures. Please refer to Appendix B for reconciliations of these measures to the most directly comparable GAAP measures and other required disclosures.
Raymond James Financial, Inc. 2020 Proxy Statement | 27
Scott A. Curtis,President, Private Client Group (PCG)
2019 Contributions include:
Led the domestic PCG business to achieverecord net revenues andpre-tax income
Achievedrecord levels of assets under administration and assets infee-based accounts
Strongadvisor recruiting and retention leading to a record number of financial advisors
Solid progress on enhancing the firm’sCompliance and Supervision infrastructure
Successful mentoring andtransition of his successor for independent contractor division
Compensation:Mr. Reilly recommended, and the Committee approved, an annual bonus for 2019 of $2,550,000.
Bella Loykhter Allaire,Executive Vice President of Technology and Operations
2019 Contributions include:
Led Technology and Operations organizations to have a significantpositive impact on the firm’s ability to recruit and retain financial advisors by providing the tools and services required to serve their clients
Successfully led a significant agenda to providebest-in-industry solutions and service levels while maintainingstrong cost discipline
Implemented anew change management process to increase awareness and adoption of new or changing technology solutions
Compensation:Mr. Reilly recommended, and the Committee approved, an annual bonus for 2019 of $2,750,000.
The following charts present the mix of compensation elements actually received for 2019 performance by our CEO and our other named executive officers (average) (excluding retirement plan contributions):
Components of Total Direct Compensation — 2019 Actual
| | |
| CEO | | Other NEOs - Average |
| |
| | 
|
28 | Raymond James Financial, Inc. 2020 Proxy Statement
Annual Pay-Setting ProcessDirect Compensation for 2019
After assessing the company’s financial and strategic performance for fiscal 2019 and evaluating the individual performance of our NEOs, the Committee exercised its discretion to award annual direct compensation for 2019 as set forth in the following table.
This Annual Direct Compensation Table differs from the Summary Compensation Table (“SCT”) on page 34 required by SEC rules, and is not a substitute for the SCT. There are two main differences:
| • | | We grant annual bonuses (cash and equity components) after our fiscal year has ended. Equity awards granted in fiscal 2020 to reward fiscal 2019 performance are therefore shown as 2019 compensation in this Annual Direct Compensation Table. The SCT, however, reports equity awards in the year they are granted, irrespective of the year they were earned. |
| • | | The SCT contains a column reporting “All Other Compensation,” which amounts are not part of the Committee’s compensation determinations and are thus not shown in this Annual Direct Compensation Table. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Annual Direct Compensation | |
| | | | | | | | | Incentive Compensation | | | | |
| Name and Principal Position | | Year | | | Salary | | | Cash Bonus | | | Time
Vesting
Stock Bonus
Awards(1)(2) | | | Performance
Vesting
Stock Bonus
Awards(1)(2)(3) | | | Time
Vesting
Stock
Retention
Awards(2)(4) | | | Total | |
| Paul C. Reilly | | | 2019 | | | $ | 500,000 | | | $ | 5,875,040 | | | $ | 2,349,984 | | | $ | 3,524,976 | (5) | | $ | 1,101,875 | | | $ | 13,351,875 | |
| Chairman and Chief | | | 2018 | | | $ | 500,000 | | | $ | 5,500,043 | | | $ | 2,199,983 | | | $ | 3,299,974 | (6) | | $ | 953,375 | | | $ | 12,453,375 | |
| Executive Officer | | | 2017 | | | $ | 486,250 | | | $ | 5,700,056 | | | $ | 1,900,015 | | | $ | 1,899,929 | (7) | | $ | 1,103,750 | | | $ | 11,090,000 | |
| Jeffrey P. Julien | | | 2019 | | | $ | 300,000 | | | $ | 2,412,554 | | | $ | 268,723 | | | $ | 268,723 | (5) | | $ | 443,570 | (8) | | $ | 3,693,570 | |
| Executive VP, Finance and | | | 2018 | | | $ | 295,000 | | | $ | 2,262,508 | | | $ | 243,746 | | | $ | 243,746 | (6) | | $ | 381,350 | | | $ | 3,426,350 | |
| Chief Financial Officer | | | 2017 | | | $ | 280,000 | | | $ | 2,000,070 | | | $ | 199,965 | | | $ | 199,965 | (7) | | $ | 441,500 | | | $ | 3,121,500 | |
| James E. Bunn | | | 2019 | | | $ | 300,000 | | | $ | 3,100,074 | | | $ | 599,963 | | | $ | 599,963 | (5) | | $ | 440,750 | | | $ | 5,040,750 | |
| President | | | 2018 | | | $ | 281,250 | | | $ | 2,825,052 | | | $ | 462,474 | | | $ | 462,474 | (6) | | $ | 381,350 | | | $ | 4,412,600 | |
| Global Equities and Investment Banking — RJA | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Scott A. Curtis President Private Client Group | | | 2019 | | | $ | 300,000 | | | $ | 2,112,563 | | | $ | 218,764 | | | $ | 218,673 | (5) | | $ | 440,750 | | | $ | 3,290,750 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bella Loykhter Allaire Executive VP Technology and Operations — RJA | | | 2019 | | | $ | 300,000 | | | $ | 2,262,513 | | | $ | 243,789 | | | $ | 243,698 | (5) | | $ | 440,750 | | | $ | 3,490,750 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Other than with respect to Mr. Reilly’s 2018 and 2019 bonuses, represents the applicable portion of any annual bonus that exceeds $275,000 for each NEO that is delivered in the form of RSUs. The proportion delivered in RSUs varies with the size of the annual bonus according to the formula presented on page 20 hereof. Of Mr. Reilly’s 2018 and 2019 total bonuses, 50% was delivered in cash and 50% in RSUs. Of the RSUs, 40% were subject to time-vesting and 60% were subject to performance vesting. Each RSU vests, if at all, on the third anniversary of the grant date. |
| (2) | Each RSU represents a contingent right to receive (i) one share of common stock and (ii) non-preferential dividend equivalents equal to the sum of any dividends on the shares of common stock underlying the RSU that were actually paid during the vesting period. |
| (3) | Represents the aggregate number of RSUs delivered as annual bonus, computed as described in footnote (1) to this table. RSUs reported in this column vest, if at all, contingent upon the company achieving certain defined adjusted ROE levels over a 3-year measurement period, in accordance with the formula presented in footnote (20) to the Outstanding Equity Awards at Fiscal Year End for 2019 table. See footnote 9 below. |
| (4) | Stock retention awards delivered in the form of RSUs. Other than with respect to Mr. Julien’s 2019 stock retention award, the RSUs vest 60% on the third, and 20% on each of the fourth and fifth anniversaries of the grant date. |
Raymond James Financial, Inc. 2020 Proxy Statement | 29
| (5) | RSUs granted in fiscal 2020 vest contingent upon the company achieving adjusted ROE over a vesting period consisting of fiscal years 2020 - 2022, as explained in footnote (3) above. The following amounts represent the maximum value at the grant date of the RSUs granted in fiscal year 2020 for fiscal year 2019 performance: Mr. Reilly $5,287,464, Mr. Julien $403,085, Mr. Bunn $899,945, Mr. Curtis $328,010, and Ms. Loykhter Allaire $365,547. |
| (6) | RSUs granted in fiscal year 2019 vest contingent upon the Company achieving adjusted ROE over a vesting period consisting of fiscal years 2019 - 2021, as explained in footnote (3) above. The following amounts represent the maximum value at the grant date of the RSUs granted in fiscal year 2019 for fiscal year 2018 performance: Mr. Reilly $4,949,961, Mr. Julien $365,619 and Mr. Bunn $693,711. |
| (7) | RSUs granted in fiscal year 2018 vest contingent upon the Company achieving adjusted ROE over a vesting period consisting of fiscal years 2018 - 2020, as explained in footnote (3) above. The following amounts represent the maximum value at the grant date of the RSUs granted in fiscal year 2018 for fiscal year 2017 performance: Mr. Reilly $2,849,894 and Mr. Julien $299,948. |
| (8) | Mr. Julien’s 2019 stock retention award includes 2,000 RSUs that vest 100% on the third anniversary of the grant date and 3,000 RSUs that vest 60% on the third, and 20% on each of the fourth and fifth anniversaries of the grant date. |
| (9) | Adjusted ROE is anon-GAAP measure. Please refer to Appendix B for a reconciliation of this measure to the most directly comparable GAAP measure and other required disclosures. |
Alignment of CEO Compensation with Total Shareholder Return.The following graph shows the total return on $100 invested in the company’s stock on September 30, 2014, compared to total annual direct compensation of our CEO for each year represented. We believe this demonstrates that our CEO’s total compensation is highly correlated to total shareholder return over these time periods. (As previously disclosed, in making its 2015 compensation decisions, the Committee approved an upward adjustment to better align CEO compensation with the Corporate Peers group.)
Hedging Policy
The company maintains a written Insider Trading Policy (“Policy”) that is designed to prohibit company personnel from violating insider trading laws and prevent even the appearance of improper conduct. The Policy applies to directors, officers, employees and other associates of the company, together with certain of their family members and controlled entities (“Covered Persons”). The Policy imposes the following restrictions on trading in securities issued by the company (including our common stock), whether or not the Covered Person is aware of material nonpublic information concerning the company.
Directors and Executive Officers. Under the Policy, members of the Company’s Board and its executive officers (the“Pre-Clearance Group”) may not, in connection with our securities:
engage in transactions in publicly traded or private options or other derivative securities
hold such securities in a margin account unless such securities have been exempted from any security interest of the broker
30 | Raymond James Financial, Inc. 2020 Proxy Statement
pledge such securities as collateral for a loan, unless the person (i) has demonstrated the financial capacity to repay the loan without selling any pledged securities, and (ii) has submitted in advance a written approval request to the Legal Department, or
utilize standing orders for longer than one business day (other than employee stock option limit orders or approved Rule 10b5-1trading plans).
All Covered Persons. In addition, no Covered Person (including thePre-Clearance Group) may, in connection with our securities:
transact in publicly traded or private options; except thatnon-Pre-Clearance Group members may sell covered call options, and/or buy protective put options innon-speculative, bona fide transactions against an existing,non-restricted long position (with certain exceptions)
enter into, modify or cancel a standing order when subject to a trading “blackout”
allow any financial advisor to purchase or sell such securities within a discretionary account, or
engage in hedging or monetization transactions.
The Policy permits Covered Persons to request limited exceptions to these restrictions from time to time from the Legal Department.
Compensation Recoupment Policy
The company maintains a Compensation Recoupment Policy that is intended to reduce potential risks associated with our compensation plans, and thus better align the long-term interests of our NEOs and our shareholders. The policy contains three triggers that could result in “claw-back” of compensation: (i) instances of financial statement restatement, (ii) discovery of a materially inaccurate performance measure that resulted in inappropriate award or vesting of incentive compensation, and (iii) serious misconduct or materially imprudent judgment that caused the company material financial or reputational harm. (Incentive compensation is defined to include any compensation other than base salary, and it thus includes cash, shares of stock, restricted shares, RSUs and stock options.) The third trigger gives the Committee authority to require forfeiture of the employee’s unvested incentive compensation awards and/or reimbursement of the most recently-received annual bonus. It applies to all executive officers and to any other employee whose annual incentive compensation exceeds 50% of total annual compensation, with the exception of Private Client Group financial advisors and branch managers.
Compensation and Risk
The Board, with the assistance of the Committee, has evaluated our compensation policies and practices for all employees. Specifically:
| ➣ | | At the direction of the Committee, an independent compensation consultant partners with our Enterprise Risk Management and Human Resources functions to conduct an independent assessment of the material incentive compensation plans across the organization every other year. |
| ➣ | | This process begins with an objective evaluation of job functions, assessing the level of risk influence across six specific categories: credit, liquidity, market, operational, legal & compliance and reputational. |
| ➣ | | Incentive plans for job functions that were identified as having the potential to expose the company to the highest level of risk are further reviewed across a consistent framework to identify potential operational plan risks of the incentive design. |
Raymond James Financial, Inc. 2020 Proxy Statement | 31
| ➣ | | The incentive design evaluation focuses on key elements of the plan design, including: (i) performance measures, (ii) funding, (iii) performance period and pay mix, (iv) goal setting, (v) leverage, and (vi) controls and processes. |
| ➣ | | In alternating years, Human Resources conducts a high level updating review with a focus on: |
Any material changes to executive and associate incentive plans
Adoption of any new incentive plans or inclusion of new roles therein
Review of any acquired company compensation plans and roles.
The most recentbi-annual review noted that our practices of requiring deferral of a portion of bonus amounts into a mix of time- and — in the case of executive officers — performance-vesting equity awards, our robust share ownership guidelines, our compensation recoupment policy and our prohibition on hedging by executives all serve to further mitigate risk in our compensation plans.
The review concluded that none of the company’s incentive plans were likely to motivate behavior that would result in a material adverse impact to the company. The potential risks identified through the process were determined to be effectively mitigated through established risk controls, leadership oversight, and our culture of proactive risk management.
After reviewing an update to the above review, our Board has concluded that our compensation policies in general, and our incentive programs in particular, remain well aligned with the interests of our shareholders and do not create risks that are reasonably likely to result in a material adverse effect on the company.
Annual Compensation Framework & Process
Pay-Setting Process. Following recommendation by our chairman and chief executive officer,CEO, the Committee sets performance priorities at the beginning of each fiscal year to guide its evaluation of company and individual executive officer performance throughout the year. These performance priorities are a directional assessment made at the beginning of the year, and their attainment ornon-attainment does not correspond to any specific compensation
decision or amount of compensation. At such time, the Committee also stipulates that annual bonuses will be funded from a pool not to exceed 6% of consolidatedpre-tax income, with no individual bonus to exceed 3% of such measure.
Following completion of a fiscal year, our chairman and chief executive officerCEO reviews the performance of the company and evaluates the individual performance of each executive officer, including the named executive officers,NEOs, against previously-determined individual goals. After consultation with our chairman emeritus, ourOur CEO then makes recommendations to the Committee as to the respective amounts of annual bonus and retention RSUs to be awarded to each named executive officerNEO (other than himself). Similarly, our chairman emeritus reviews the performance of the CEO and discusses with the Committee (in the absence of the CEO) his recommendations as toreviews the performance of the CEO and determines the appropriate amounts of the CEO’shis annual bonus and retention RSU grants.
In the course of its deliberations, the Committee also discusses these recommendations with the other non-executive directors.To inform its use of discretion in determining compensation, the Committee evaluates both company and individual performance. The Committee does not utilize formulaic financial performance goals or targets, and performance metrics are not assigned any specific weighting for purposes of determining the compensation awarded to the CEO or other NEOs. Since market conditions — and the macroeconomic environment — strongly affect the financial services industry and can change dramatically during the course of a year, the Committee assesses financial performance at the end of the year in light of the most recent facts and circumstances. No single financial or performance metric controls compensation decisions. Rather, such data are used to help the Committee better understand company and individual performance. After evaluating the performance of our CEO and each of our other named executive officersNEOs for the relevant fiscal year, the Committee applies its discretion to determine the compensation for each.
32 | Raymond James Financial, Inc. 2020 Proxy Statement
Effect ofIncome Deduction Limitations under Section 162(m).In determining compensation for the named executive officers, the Committee considers the potential impact of Section 162(m) of the Internal Revenue Code. Section Code (“§162(m)”) generally disallowssets a tax deduction to public corporations for compensation greater thanlimit of $1 million paid per fiscalon the amount of compensation that the company may deduct for federal income tax purposes in any given year with respect to eachthe compensation of the corporation’s ‘‘covered employees’’ (generally, the chief“covered employees,” which currently includes our principal executive officer, our principal financial officer and the next three most highly compensated executive officers (as well as individuals in these categories in certain prior years). Historically, compensation that qualified as “performance-based compensation” under §162(m) could be excluded from this $1 million limit. This exception was repealed effective for taxable years beginning after 2017, with certain transition relief. The Committee’s general intent prior to repeal was to structure our executive compensation programs so that some payments could qualify as “performance-based compensation.” However, the Committee may have decided from time to time to grant compensation that would not qualify as “performance-based compensation” if appropriate to achieve the objectives of the endcompany’s compensation program. The Committee continues to believe that the tax deduction limitation should not be permitted to compromise its ability to design and maintain executive compensation arrangements that will attract and retain the executive talent to compete successfully. Accordingly, achieving the desired flexibility in the design and delivery of any fiscal year). However, compensation which qualifies as ‘‘performance-based’’may result in compensation that, in certain cases, is excluded from the $1 million per executive officer limit if, among other requirements, the compensationnot deductible for federal income tax purposes, and it is payable only upon attainment of pre-established, objective performance goals under a plan approved by the company’s shareholders.
As part of our compensation program for executive officers, the company maintains the Amended and Restated 2012 Stock Incentive Plan (‘‘2012 Plan’’). The 2012 Plan provides for annual performance-basedpossible that awards
to eligible employees. For each executive officer, the Committee determines on an annual basis an award maximum under the 2012 Plan. Award maximums are expressed as a percentage of consolidated pre-tax income — an objectively determined performance criteria that is intended to qualify
foras “performance-based compensation” under the
performance-based exemptiontransition relief may not so qualify.Based on the factors discussed under “2019 Compensation Decisions” above, in fiscal 2019 the company paid, and in fiscal 2020 the Committee expects the Company to the $1 million deduction limit under Section 162(m). Award maximums pertain to the cumulative value of an executive officer’spay, certain NEOs compensation, including a base salary, annual variable compensation — consisting of the annual bonus (including a portion delivered in the form of RSUs) and retention RSU award. We believe that the annual bonuses and retention RSUs awardedthat, in the aggregate, exceeds $1 million in value. The Committee believes that this compensation is necessary in order to maintain the NEOs constituted performance-basedcompetitiveness of the total compensation package and, should therefore beas a result, has determined that it is appropriate, regardless of whether certain amounts of such compensation are ultimately deductible by the company for U.S. federal income tax purposes. While our policy, in general, is to maximize the tax deductibility of compensation paid to executive officers covered under Section 162(m), the Committee nevertheless may authorize awards or payments that might not be tax deductible if it believes they are in the best interests of the company and its shareholders. In the event the Committee determines to grant additional compensation that is not performance-based compensation to an executive subject to the provisions of Section 162(m), the additional compensation will be subject to the $1 million deduction limitation.
Raymond James Financial, Inc. 2020 Proxy Statement | 33
Compensation and Risk. The Board, with the assistance of the Committee, has evaluated our compensation policies and practices for all employees. Specifically, the Board reviewed an update of the following, in-depth review of incentive programs:
At the direction of the Committee, an independent compensation consultant partnered with our Enterprise Risk Management and Human Resources functions to conduct an independent assessment of the material incentive compensation plans across the organization.
This process began with an objective evaluation of job functions, assessing the level of risk influence across six specific categories: credit, liquidity, market, operational, legal & compliance and reputational.
Incentive plans for job functions that were identified as having the potential to expose the company to the highest level of risk were further reviewed across a consistent framework to identify potential operational plan risks of the incentive design.
The incentive design evaluation focused on key elements of the plan design, including: (i) performance measures, (ii) funding, (iii) performance period and pay mix, (iv) goal setting, (v) leverage, and (vi) controls and processes.
Additionally, the review noted that the mandatory deferral (a portion of bonus amounts exceeding $275,000 are delivered in a mix of time and - in the case of executive officers - performance vesting equity awards), robust share ownership guidelines, compensation recoupment policy and prohibition on hedging by executives further mitigate risk in our compensation plans.
The review concluded that none of the company’s formulaic incentive plans were likely to motivate behavior that would result in material adverse impact to the company. The potential risks identified through the process were determined to be effectively mitigated through established risk controls, leadership oversight, and the culture of proactive risk management.
In light of the above, our Board continues to conclude that our compensation policies in general, and our incentive programs in particular, remain well aligned with the interests of our shareholders and do not create risks that are reasonably likely to result in a material adverse effect on the Company.
20172019 COMPENSATION TABLES
Summary Compensation Table for Fiscal 20172019
The following table sets forth information about compensation earned by our named executive officers during fiscal 2015, 20162017, 2018 and 20172019 in accordance with SEC rules. The information presented below may be different from compensation information presented in this Proxy Statement under the caption ‘‘Compensation“Compensation Discussion and Analysis,’’” since that section describes compensation decisions made inwith respect ofto the indicated fiscal year, regardless of when the compensation was actually paid or granted. For ana more detailed explanation of the principal differences between the presentation in the Compensation Discussion and Analysis and the table below, please see the note on page 32.
|
| | | | | | | | | | | | | | |
| Name | Year | Salary | Bonus (1) | Stock Awards(2) | Option Awards(2) | All Other Compensation(3) | Total |
| Paul C. Reilly | 2017 | $ | 486,250 |
| $5,700,056 | $ | 3,394,366 |
| (4) | $ | — |
| $187,575 | $9,768,247 |
| Chairman and Chief | 2016 | $ | 445,000 |
| $4,575,034 | $ | 2,997,970 |
|
| $ | — |
| $231,809 | $8,249,813 |
| Executive Officer - RJF | 2015 | $ | 445,000 |
| $4,325,030 | $ | 1,549,964 |
|
| $ | 195,192 |
| $107,119 | $6,622,305 |
| Jeffrey P. Julien | 2017 | $ | 280,000 |
| $2,000,070 | $ | 672,146 |
| (5) | $ | — |
| $138,932 | $3,091,148 |
| Executive VP, Finance | 2016 | $ | 280,000 |
| $1,737,554 | $ | 556,444 |
|
| $ | — |
| $119,197 | $2,693,195 |
| Chief Financial Officer and Treasurer - RJF | 2015 | $ | 278,750 |
| $1,580,056 | $ | 249,998 |
|
| $ | 195,192 |
| $57,256 | $2,361,252 |
| John C. Carson, Jr. | 2017 | $ | 300,000 |
| $2,187,516 | $ | 884,672 |
| (6) | $ | — |
| $104,786 | $3,476,974 |
| President - RJF | 2016 | $ | 300,000 |
| $2,375,028 | $ | 736,484 |
|
| $ | — |
| $103,928 | $3,515,440 |
| | 2015 | $ | 300,000 |
| $2,150,016 | $ | 412,479 |
|
| $ | 195,192 |
| $72,452 | $3,130,139 |
| Jeffrey E. Trocin | 2017 | $ | 305,000 |
| $2,700,053 | $ | 639,661 |
| (7) | $ | — |
| $183,789 | $3,828,503 |
| Co-President, Global Equities | 2016 | $ | 305,000 |
| $1,620,000 | $ | 798,994 |
| | $ | — |
| $178,541 | $2,902,535 |
| and Investment Banking - RJA | 2015 | $ | 305,000 |
| $2,337,506 | $ | 699,961 |
| | $ | 195,192 |
| $45,973 | $3,583,632 |
| Dennis W. Zank | 2017 | $ | 330,000 |
| $2,575,074 | $ | 909,688 |
| (8) | $ | — |
| $122,458 | $3,937,220 |
| Chief Operating Officer - RJF | 2016 | $ | 330,000 |
| $2,450,012 | $ | 786,456 |
|
| $ | — |
| $129,789 | $3,696,257 |
| | 2015 | $ | 330,000 |
| $2,300,044 | $ | 462,457 |
|
| $ | 195,192 |
| $75,031 | $3,362,724 |
__________________
29. | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Year | | | Salary | | | Bonus(1) | | | Stock Awards(2) | | | All Other
Compensation(3) | | | Total | |
Paul C. Reilly | | | 2019 | | | $ | 500,000 | | | $ | 5,875,040 | | | $ | 6,453,332 | (4) | | $ | 262,022 | | | $ | 13,090,394 | |
Chairman and CEO | | | 2018 | | | $ | 500,000 | | | $ | 5,500,043 | | | $ | 4,903,694 | | | $ | 219,906 | | | $ | 11,123,643 | |
| | | 2017 | | | $ | 486,250 | | | $ | 5,700,056 | | | $ | 3,394,366 | | | $ | 187,575 | | | $ | 9,768,247 | |
| | | | | | | |
Jeffrey P. Julien | | | 2019 | | | $ | 300,000 | | | $ | 2,412,554 | | | $ | 868,842 | (5) | | $ | 114,831 | | | $ | 3,696,227 | |
EVP, Finance and Chief Financial
Officer | | | 2018 | | | $ | 295,000 | | | $ | 2,262,508 | | | $ | 841,430 | | | $ | 141,690 | | | $ | 3,540,628 | |
| | | 2017 | | | $ | 280,000 | | | $ | 2,000,070 | | | $ | 672,146 | | | $ | 138,932 | | | $ | 3,091,148 | |
| | | | | | | |
James E. Bunn | | | 2019 | | | $ | 300,000 | | | $ | 3,100,074 | | | $ | 1,306,298 | (6) | | $ | 115,385 | | | $ | 4,821,757 | |
President, Global Equities and Investment Banking—RJA | | | 2018 | | | $ | 281,250 | | | $ | 2,825,052 | | | $ | 1,484,167 | | | $ | 153,176 | | | $ | 4,743,645 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Scott A. Curtis | | | 2019 | | | $ | 300,000 | | | $ | 2,112,563 | | | $ | 781,320 | (7) | | $ | 125,363 | | | $ | 3,319,246 | |
President, Private Client Group | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | |
Bella Loykhter Allaire | | | 2019 | | | $ | 300,000 | | | $ | 2,262,513 | | | $ | 831,278 | (8) | | $ | 317,148 | | | $ | 3,710,939 | |
EVP, Technology and Operations—RJA | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| |
| (1) | The amounts disclosed in the Bonus column represent the annual cash bonus, as described in the CD&A, awarded to the Named Executive Officers.NEOs. |
| |
| (2) | The amounts shown in the Stock Awards and Option Awards columnscolumn represent the grant date fair value of equity awards granted to the Named Executive OfficersNEOs in the fiscal year shown. For a description of the assumptions used in calculating the fair value of equity awards under ASC Topic 718, see Note 202 to our financial statements in our Annual Report on Form 10-K report for the year ended September 30, 2017.2019. For more information, see the Grants of Plan Based Awards for Fiscal 20172019 table below. |
| |
| (3) | See the All Other Compensation table below for a breakdown of these amounts. |
| |
| (4) | Includes 28,44641,608 RSUs that are time-vestingvest over time and 18,44543,662 RSUs that are performance vesting awards. The maximum value at the grant date of the performance vesting RSUs for Mr. Reilly is $2,006,171.$4,949,961. |
| |
| (5) | Includes 7,1558,225 RSUs that are time-vestingvest over time and 2,1543,225 RSUs that are performance vesting awards. The maximum value at the grant date of the performance vesting RSUs for Mr. Julien is $234,281.$365,619. |
| |
| (6) | Includes 8,62011,119 RSUs that are time-vestingvest over time and 3,6206,119 RSUs that are performance vesting awards. The maximum value at the grant date of the performance vesting RSUs for Mr. CarsonBunn is $393,729.$693,711. |
| |
| (7) | Includes 6,9317,646 RSUs that are time-vestingvest over time and 1,9302,646 RSUs that are performance vesting awards. The maximum value at the grant date of the performance vesting RSUs for Mr. TrocinCurtis is $209,916.$299,978. |
| |
| (8) | Includes 8,7937,977 RSUs that are time-vestingvest over time and 3,7922,976 RSUs that are performance vesting awards. The maximum value at the grant date of the performance vesting RSUs for Mr. ZankMs. Loykhter Allaire is $412,437.$337,389. |
34 | Raymond James Financial, Inc. 2020 Proxy Statement
All Other Compensation Table for Fiscal 20172019
The following table sets forth more detailed information concerning the items included in the ‘‘All“All Other Compensation’’Compensation” column of the Summary Compensation Table above.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Employee Stock Ownership Plan Contribution | Profit Sharing Contribution | 401(k) Company Match | Deferred Compensation Plan Contribution(a) | Deferred Compensation Plan Gain(a) | Accrued Dividends (b) | Commissions | Perquisites | | Total All Other Compensation |
| Paul C. Reilly | $ | 5,300 |
| $ | 12,609 |
| $ | 1,000 |
| $ | 40,500 |
| $ | 26,985 |
| $ | 73,064 |
| $ | — |
| $ | 28,117 |
| (c) | $ | 187,575 |
|
| Jeffrey P. Julien | $ | 5,300 |
| $ | 14,384 |
| $ | 1,000 |
| $ | 40,500 |
| $ | 67,299 |
| $ | 10,169 |
| $ | 280 |
| $ | — |
| | $ | 138,932 |
|
| John C. Carson, Jr. | $ | 5,300 |
| $ | 13,633 |
| $ | 1,000 |
| $ | 40,500 |
| $ | 22,394 |
| $ | 21,959 |
| $ | — |
| $ | — |
| | $ | 104,786 |
|
| Jeffrey E. Trocin | $ | 5,300 |
| $ | 14,179 |
| $ | 1,000 |
| $ | 40,500 |
| $ | 102,864 |
| $ | 19,649 |
| $ | 297 |
| $ | — |
| | $ | 183,789 |
|
| Dennis W. Zank | $ | 5,300 |
| $ | 14,726 |
| $ | 1,000 |
| $ | 40,500 |
| $ | 27,345 |
| $ | 18,494 |
| $ | 15,093 |
| $ | — |
| | $ | 122,458 |
|
___________________
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Employee
Stock
Ownership
Plan
Contribution | | Profit Sharing
Contribution(1) | | 401(k)
Company
Match | | Deferred
Compensation
Plan
Contribution(2) | | Deferred
Compensation
Plan Gain(2) | | Accrued
Dividends(3) | | Commissions | | Perquisites | | Total All Other
Compensation |
Paul C. Reilly | | | $ | 5,500 | | | | $ | 15,107 | | | | $ | 1,000 | | | | $ | 44,100 | | | | $ | 3,784 | | | | $ | 156,212 | | | | $ | — | | | | $ | 36,319 | (4) | | | $ | 262,022 | |
Jeffrey P. Julien | | | $ | 5,500 | | | | $ | 17,138 | | | | $ | 1,000 | | | | $ | 44,100 | | | | $ | 24,141 | | | | $ | 22,952 | | | | $ | — | | | | $ | — | | | | $ | 114,831 | |
James E. Bunn | | | $ | 5,500 | | | | $ | 15,576 | | | | $ | 1,000 | | | | $ | 44,100 | | | | $ | 13,463 | | | | $ | 35,746 | | | | $ | — | | | | $ | — | | | | $ | 115,385 | |
Scott A. Curtis | | | $ | 5,500 | | | | $ | 15,762 | | | | $ | 1,000 | | | | $ | 44,100 | | | | $ | 7,528 | | | | $ | 32,697 | | | | $ | 849 | | | | $ | 17,927 | (5) | | | $ | 125,363 | |
Bella Loykhter Allaire | | | $ | 5,500 | | | | $ | 15,038 | | | | $ | 1,000 | | | | $ | 44,100 | | | | $ | 216,648 | | | | $ | 34,862 | | | | $ | — | | | | $ | — | | | | $ | 317,148 | |
| (1) | The employer-funded profit sharing contribution is based on the length of service and fiscal-year compensation, capped at the IRS annual compensation limit. |
(a) | (2) | See Nonqualified Deferred Compensation table for more information. |
| |
(b)(3) | Includes accrued dividend equivalents on unvested restricted stock unitsRSUs as of September 30, 2017.2019. |
| |
(c)(4) | Includes company-paid travel, hotel and meal related expenses for guest or spouse in conjunction with company-sponsoredoff-site business meetings and tickets to sporting events.meetings. Company-paid travel expenses for spouse include approximately $14,900$30,387 in airfare ticket costs. |
| (5) | Includes company-paid travel, hotel and meal related expenses for spouse in conjunction with company-sponsoredoff-site business meetings. |
Grants of Plan Based Awards for Fiscal 2017
2019The following table contains information concerning plan-based awards granted to each of the named executive officersNEOs during fiscal 2017.2019.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Estimated Future Payouts Under Equity
Incentive Plan Awards (1)(2) | | | | |
Name | | Grant Date | | Threshold(3) | | Target(4) | | Maximum(5) | | All Other Stock Awards: Number of Units(2) | | Grant Date Fair
Value of Stock Awards ($)(6) |
Paul C. Reilly | | | | 12/14/2018 | | | | | 21,831 | | | | | 43,662 | | | | | 65,493 | | | | | | | | | $ | 3,299,974 | |
| | | | | 12/14/2018 | | | | | | | | | | | | | | | | | | | | 29,108 | (7) | | | $ | 2,199,983 | |
| | | | | 11/29/2018 | | | | | | | | | | | | | | | | | | | | 12,500 | (8) | | | $ | 953,375 | |
Jeffrey P. Julien | | | | 12/14/2018 | | | | | 1,613 | | | | | 3,225 | | | | | 4,838 | | | | | | | | | $ | 243,746 | |
| | | | | 12/14/2018 | | | | | | | | | | | | | | | | | | | | 3,225 | (7) | | | $ | 243,746 | |
| | | | | 11/29/2018 | | | | | | | | | | | | | | | | | | | | 5,000 | (8) | | | $ | 381,350 | |
James E. Bunn | | | | 12/14/2018 | | | | | 3,060 | | | | | 6,119 | | | | | 9,179 | | | | | | | | | $ | 462,474 | |
| | | | | 12/14/2018 | | | | | | | | | | | | | | | | | | | | 6,119 | (7) | | | $ | 462,474 | |
| | | | | 11/29/2018 | | | | | | | | | | | | | | | | | | | | 5,000 | (8) | | | $ | 381,350 | |
Scott A. Curtis | | | | 12/14/2018 | | | | | 1,323 | | | | | 2,646 | | | | | 3,969 | | | | | | | | | $ | 199,985 | |
| | | | | 12/14/2018 | | | | | | | | | | | | | | | | | | | | 2,646 | (7) | | | $ | 199,985 | |
| | | | | 11/29/2018 | | | | | | | | | | | | | | | | | | | | 5,000 | (8) | | | $ | 381,350 | |
Bella Loykhter Allaire | | | | 12/14/2018 | | | | | 1,488 | | | | | 2,976 | | | | | 4,464 | | | | | | | | | $ | 224,926 | |
| | | | | 12/14/2018 | | | | | | | | | | | | | | | | | | | | 2,977 | (7) | | | $ | 225,002 | |
| | | | | 11/29/2018 | | | | | | | | | | | | | | | | | | | | 5,000 | (8) | | | $ | 381,350 | |
Raymond James Financial, Inc. 2020 Proxy Statement | 35
|
| | | | | | | |
| Name | Grant Date | Estimated Future Payouts Under Equity Incentive Plan Awards(1)(2) | All Other Stock Awards: Number of Units(2) | | Grant Date Fair Value of Stock and Option Awards ($)(6) |
Threshold(3) | Target(4) | Maximum(5) |
| Paul C. Reilly | 12/15/2016 | 9,223 | 18,445 | 27,668 |
| | $1,337,447 |
| | 12/15/2016 |
|
|
| 18,446 | (7) | $1,337,519 |
| | 11/30/2016 | | | | 10,000 | (8) | $719,400 |
| Jeffrey P. Julien | 12/15/2016 | 1,077 | 2,154 | 3,231 | | | $156,187 |
| | 12/15/2016 | | | | 2,155 | (7) | $156,259 |
| | 11/30/2016 | | | | 5,000 | (8) | $359,700 |
| John C. Carson, Jr. | 12/15/2016 | 1,810 | 3,620 | 5,430 | | | $262,486 |
| | 12/15/2016 | | | | 3,620 | (7) | $262,486 |
| | 11/30/2016 | | | | 5,000 | (8) | $359,700 |
| Jeffrey E. Trocin | 12/15/2016 | 965 | 1,930 | 2,895 | | | $139,944 |
| | 12/15/2016 | | | | 1,931 | (7) | $140,017 |
| | 11/30/2016 |
|
|
| 5,000 | (8) | $359,700 |
| Dennis W. Zank | 12/15/2016 | 1,896 | 3,792 | 5,688 | | | $274,958 |
| | 12/15/2016 | | | | 3,793 | (7) | $275,030 |
| | 11/30/2016 | | | | 5,000 | (8) | $359,700 |
___________________
| |
| (1) | The ‘‘Estimated“Estimated Future Payouts Under Equity Incentive Plan Awards’’Awards” columns represent the minimum, target and maximum number of shares that could be received by each listed officer upon the vesting of RSUs, excluding dividend equivalents. RSUs vest based on the Company’s adjusted three-year average after-tax return on equityROE for fiscal years 2017, 20182019, 2020 and 2019.2021. See footnote (16)(20) to the Outstanding Equity Awards at Fiscal Year End for 20172019 table hereof for more information. See footnote 9. |
| |
| (2) | Each RSU represents a contingent right to receive (i) one share of common stock and(ii) non-preferential dividend equivalents equal to the sum of any dividends on the shares of common stock underlying the RSUs that were actually paid during the vesting period. |
| |
| (3) | Threshold is 50 percent of awarded RSUs if the adjusted three-year average after-tax return on equityROE is at least equal to 57 percent. |
| |
| (4) | Target is 100 percent of awarded RSUs if the adjusted three-year average after-tax return on equityROE is equal to 1113 percent. |
| |
| (5) | Maximum is 150 percent of awarded RSUs if the adjusted three-year average after-tax return on equityROE is 1719 percent or more. |
| |
| (6) | Reflects the grant date fair value of each equity award computed in accordance with ASC Topic 718. For a description of the assumptions used in calculating the fair value of equity awards under ASC Topic 718, see Note 20 to the2 of our financial statements in our Annual Report on Form10-K for the fiscal year ended September 30, 2017.2019. |
| |
| (7) | We deliver a portion of the annual bonus awarded to highly compensated employees in the form of RSUs (see the CD&A for more information). These RSUs vest approximately three years from the date of grant. |
| |
| (8) | We grant stock retention awards in the form of RSUs. These RSUs vest 60% on the third, and 20% on each of the fourth and fifth, anniversaries of the grant date. |
| (9) | Adjusted ROE is a non-GAAP measure. Please refer to Appendix B for a reconciliation of this measure to the most directly comparable GAAP measure and other required disclosures. |
36 | Raymond James Financial, Inc. 2020 Proxy Statement
Outstanding Equity Awards at Fiscal Year End for 20172019
The following table contains information as of September 30, 20172019 about the outstanding equity awards held by our named executive officers.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | | | | Stock Awards | |
Name | | Number of
Securities
Underlying
Unexercised
Options
Exercisable | | | Number of
Securities
Underlying
Unexercised
Options
Unexercisable | | | Option
Exercise
Price | | | Option
Expiration
Date | | | | | Number of
Units of
Stock That
Have Not
Vested | | | Market
Value of
Units of
Stock That
Have Not
Vested(1) | | | Equity Incentive
Plan Awards:
Number of Unearned
Units That
Have Not
Vested(2) | | | Equity Incentive
Plan Awards:
Market Value of
Unearned
Units That
Have Not
Vested(1) | |
Paul C. Reilly | | | | | | | 2,500 | | | $ | 55.49 | | | | 11/20/21 | (3) | | | | | 18,446 | (4) | | $ | 1,521,057 | | | | 27,668 | (5) | | $ | 2,281,503 | |
| | | | | | | | | | | | | | | | | | | | | | 4,000 | (6) | | $ | 329,840 | | | | 32,894 | (7) | | $ | 2,712,439 | |
| | | | | | | | | | | | | | | | | | | | | | 21,930 | (8) | | $ | 1,808,348 | | | | 65,493 | (9) | | $ | 5,400,553 | |
| | | | | | | | | | | | | | | | | | | | | | 10,000 | (10) | | $ | 824,600 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 29,108 | (11) | | $ | 2,400,246 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 12,500 | (12) | | $ | 1,030,750 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 12,500 | (13) | | $ | 1,030,750 | | | | | | | | | |
Jeffrey P. Julien | | | | | | | 2,500 | | | $ | 55.49 | | | | 11/20/21 | (3) | | | | | 2,155 | (4) | | $ | 177,701 | | | | 3,231 | (5) | | $ | 266,428 | |
| | | | | | | | | | | | | | | | | | | | | | 2,000 | (6) | | $ | 164,920 | | | | 3,462 | (7) | | $ | 285,477 | |
| | | | | | | | | | | | | | | | | | | | | | 2,308 | (8) | | $ | 190,318 | | | | 4,838 | (9) | | $ | 398,941 | |
| | | | | | | | | | | | | | | | | | | | | | 5,000 | (10) | | $ | 412,300 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 3,225 | (11) | | $ | 265,934 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 5,000 | (12) | | $ | 412,300 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 5,000 | (13) | | $ | 412,300 | | | | | | | | | |
James E. Bunn | | | 800 | | | | | | | $ | 48.20 | | | | 11/21/20 | (14) | | | | | 4,597 | (4) | | $ | 379,069 | | | | 9,179 | (9) | | $ | 756,900 | |
| | | | 1,000 | | | | 1,000 | | | $ | 55.49 | | | | 11/20/21 | (15) | | | | | 560 | (16) | | $ | 46,178 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 8,977 | (8) | | $ | 740,243 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 3,000 | (10) | | $ | 247,380 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 6,119 | (11) | | $ | 504,573 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 8,000 | (12) | | $ | 659,680 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 5,000 | (13) | | $ | 412,300 | | | | | | | | | |
Scott A. Curtis | | | 1,582 | | | | | | | $ | 37.87 | | | | 11/29/19 | (17) | | | | | 1,793 | (4) | | $ | 147,851 | | | | 2,688 | (5) | | $ | 221,652 | |
| | | | 7,497 | | | | | | | $ | 48.20 | | | | 11/21/20 | (18) | | | | | 3,000 | (6) | | $ | 247,380 | | | | 3,029 | (7) | | $ | 249,771 | |
| | | | 10,000 | | | | 2,500 | | | $ | 55.49 | | | | 11/20/21 | (3) | | | | | 2,020 | (8) | | $ | 166,569 | | | | 3,969 | (9) | | $ | 327,284 | |
| | | | | | | | | | | | | | | | | | | | | | 5,000 | (10) | | $ | 412,300 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 2,646 | (11) | | $ | 218,189 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 5,000 | (12) | | $ | 412,300 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 5,000 | (13) | | $ | 412,300 | | | | | | | | | |
Bella Loykhter Allaire | | | 2,074 | | | | | | | $ | 48.20 | | | | 11/21/20 | (19) | | | | | 2,069 | (4) | | $ | 170,610 | | | | 3,102 | (5) | | $ | 255,791 | |
| | | | | | | | 2,500 | | | $ | 55.49 | | | | 11/20/21 | (3) | | | | | 3,000 | (6) | | $ | 247,380 | | | | 3,246 | (7) | | $ | 267,665 | |
| | | | | | | | | | | | | | | | | | | | | | 2,164 | (8) | | $ | 178,443 | | | | 4,464 | (9) | | $ | 368,101 | |
| | | | | | | | | | | | | | | | | | | | | | 7,000 | (10) | | $ | 577,220 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 2,977 | (11) | | $ | 245,483 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 5,000 | (12) | | $ | 412,300 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 5,000 | (13) | | $ | 412,300 | | | | | | | | | |
Raymond James Financial, Inc. 2020 Proxy Statement | 37
|
| | | | | | | | | | | | |
| | Option Awards | | Stock Awards |
| Name | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | | Number of Units of Stock That Have Not Vested | Market Value of Units of Stock That Have Not Vested(1) | Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested(2) | Equity Incentive Plan Awards: Market Value Of Unearned Units That Have Not Vested(1) |
| Paul C. Reilly | 2,500 | 2,500 | $37.87 | 11/29/2019 | (3) |
| 4,000 | (4) | $337,320 | 14,142 | (5) | $1,192,595 |
| | 7,500 | 5,000 | $48.20 | 11/21/2020 | (6) |
| 14,142 | (7) | $1,192,595 | 20,890 | (8) | $1,761,654 |
| |
| 12,500 | $55.49 | 11/20/2021 | (9) |
| 10,000 | (10) | $843,300 | 18,445 | (11) | $1,555,467 |
| |
|
|
|
|
|
| 20,891 | (12) | $1,761,738 |
|
|
|
| |
|
|
|
|
|
| 10,000 | (13) | $843,300 |
|
|
|
| | | | | | | | 18,446 | (14) | $1,555,551 | | | |
| Jeffrey P. Julien |
| 2,500 | $37.87 | 11/29/2019 | (3) |
| 2,281 | (7) | $192,357 | 2,281 | (5) | $192,357 |
| | 7,500 | 5,000 | $48.20 | 11/21/2020 | (6) |
| 5,000 | (10) | $421,650 | 2,325 | (8) | $196,067 |
| |
| 12,500 | $55.49 | 11/20/2021 | (9) |
| 2,326 | (12) | $196,152 | 2,154 | (11) | $181,647 |
| |
|
|
|
|
|
| 5,000 | (13) | $421,650 |
|
|
|
| | | | | | | | 2,155 | (14) | $181,731 | | | |
| John C. Carson, Jr. |
| 12,500 | $55.49 | 11/20/2021 | (9) |
| 3,764 | (7) | $317,418 | 3,763 | (5) | $317,334 |
| |
|
|
|
|
|
| 5,000 | (10) | $421,650 | 3,876 | (8) | $326,863 |
| |
|
|
|
|
|
| 3,877 | (12) | $326,947 | 3,620 | (11) | $305,275 |
| | | | | | | | 5,000 | (13) | $421,650 | | | |
| | | | | | | | 3,620 | (14) | $305,275 | | | |
| Jeffrey E. Trocin | 16,000 | 4,000 | $37.87 | 11/29/2019 | (15) |
| 6,387 | (7) | $538,616 | 6,386 | (5) | $538,531 |
| | 7,500 | 5,000 | $48.20 | 11/21/2020 | (6) |
| 5,000 | (10) | $421,650 | 4,415 | (8) | $372,317 |
| |
| 12,500 | $55.49 | 11/20/2021 | (9) |
| 4,415 | (12) | $372,317 | 1,930 | (11) | $162,757 |
| | | | | | | | 5,000 | (13) | $421,650 | | | |
| | | | | | | | 1,931 | (14) | $162,841 | | | |
| Dennis W. Zank |
| 2,500 | $37.87 | 11/29/2019 | (3) |
| 4,220 | (7) | $355,873 | 4,219 | (5) | $355,788 |
| |
| 5,000 | $48.20 | 11/21/2020 | (6) |
| 5,000 | (10) | $421,650 | 4,307 | (8) | $363,209 |
| |
| 12,500 | $55.49 | 11/20/2021 | (9) |
| 4,307 | (12) | $363,209 | 3,792 | (11) | $319,779 |
| |
|
|
|
|
|
| 5,000 | (13) | $421,650 |
|
|
|
| | | | | | | | 3,793 | (14) | $319,864 | | | |
___________________
| |
| (1) | The market value of stock awards is based on the closing market price of our common stock on the New York Stock ExchangeNYSE on September 30, 2017,2019, which was $84.33.$82.46. |
| |
| (2) | The number of units reported assumes that the award received by each named executive officerNEO upon vesting is 100 percent of awarded RSUs based upon achieving an adjusted average after-tax returnROE based on equitythe thresholds disclosed in footnote (20) to this table. Please refer to Appendix B for a reconciliation of 12 percentGAAP financial measures to non-GAAP measures for grants prior to fiscal year 2016 and 11 percent for grants in fiscal years 20162017, 2018 and 2017. See footnote (16) to this table for more information. For purposes of calculating the adjusted average after-tax return on equity, our fiscal year 2017 reported results on a GAAP basis were adjusted to exclude the effect of acquisition-related expenses, losses on the extinguishment of debt, and amounts related to a certain legal settlement. For purposes of calculating the adjusted average after-tax return on equity, our fiscal year 2016 reported results on a GAAP basis were adjusted to exclude the effect of acquisition-related expenses and amounts related to a certain legal settlement. See the reconciliation schedule published on page 38 of our Annual Report on Form 10-K for the year ended September 30, 2017 for more2019. |
information. There were no non-GAAP adjustments to our fiscal year 2015 reported results for purposes of calculating the adjusted average after‑tax return on equity.
| |
| (3) | The 12,5002,500 option award was granted seven years prior to the option expiration date. The unexercisable options vest 100% in five years from the date of grant. |
| |
| (4) | The RSU award was granted on November 21, 2013 and vests 60% in three years, 20% in four years and 20% in five years from date of grant. |
| |
(5) | The RSU award was granted on December 15, 20142016 and cliff vests three years from that date. |
| (5) | The RSU award was granted on December 15, 2016 and vests three years from that date based on the Company’scompany’s three-year adjusted three-year average after-tax return on equityROE for fiscal years 2015,2017, 2018 and 2019. Represents the maximum of 150 percent of awarded RSUs given the adjusted average ROE for fiscal years 2017, 2018 and 2019. |
| (6) | The RSU award was granted on November 18, 2015. The unvested RSUs vest 50% in four years and 50% in five years from the date of grant. |
| (7) | The RSU award was granted on December 15, 2017 and vests three years from that date based on the company’s three-year adjusted average ROE for fiscal years 2018, 2019 and 2020. Represents the maximum of 150 percent of awarded RSUs given the estimated adjusted average ROE for fiscal years 2018 and 2019. |
| (8) | The RSU award was granted on December 15, 2017 and cliff vests three years from that date. |
| (9) | The RSU award was granted on December 14, 2018 and vests three years from that date based on the company’s three-year adjusted average ROE for fiscal years 2019, 2020 and 2021. Represents the maximum of 150 percent of awarded RSUs given the estimated adjusted average ROE for fiscal year 2019. |
| (10) | The RSU award was granted on November 30, 2016 and 2017.vests 60% three years, 20% four years and 20% five years from grant date. |
| (11) | The RSU award was granted on December 14, 2018 and cliff vests three years from that date. |
(6) | (12) | The 12,500RSU award was granted on November 30, 2017 and vests 60% three years, 20% four years and 20% five years from grant date. |
| (13) | The RSU award was granted on November 29, 2018 and vests 60% three years, 20% four years and 20% five years from grant date. |
| (14) | The 4,000 option award was granted seven years prior to the option expiration date. |
| (15) | The 5,000 option award was granted seven years prior to the option expiration date. The unexercisable options vest five years from date of grant. |
| (16) | The RSU award was granted on November 19, 2015. The unvested RSUs vest 50% in four years and 50% in five years from the date of grant. |
| |
(7)(17) | The RSU10,000 option award was granted on December 15, 2014 and cliff vests in threeseven years from thatprior to the option expiration date. |
| |
(8)(18) | The RSU10,000 option award was granted on December 15, 2015 and vests in threeseven years from that date based onprior to the Company’s adjusted three-year average after-tax return on equity for fiscal years 2016, 2017 and 2018.option expiration date. |
| |
(9)(19) | The 12,500 option award was granted seven years prior to the option expiration date. The unexerciseable options vest 60% in three years, 20% in four years and 20% in five years from the date of grant. |
| |
(10)(20) | The RSU award was granted on November 18, 2015 and vests 60% in three years, 20% in four years and 20% in five years from grant date. |
| |
(11) | The RSU award was granted on December 15, 2016 and vests in three years from that date based on the Company’s adjusted three-year average after-tax return on equity for fiscal years 2017, 2018 and 2019. |
| |
(12) | The RSU award was granted on December 15, 2015 and cliff vests in three years from that date. |
| |
(13) | The RSU award was granted on November 30, 2016 and vests 60% in three years, 20% in four years and 20% in five years from the grant date. |
| |
(14) | The RSU award was granted on December 15, 2016 and cliff vests in three years from that date. |
| |
(15) | The 20,000 option award was granted seven years prior to the option expiration date. The unexerciseable options vest 100% in five years from the date of grant. |
| |
(16) | Certain RSUs granted since fiscal year 20152016 vest on the 3rd anniversary of the grant only if the company attains certain adjusted average after-tax return on equity (“ROE”)ROE levels over a3-year vesting period. The vesting formulas are as follows, (withwith results to be interpolated as necessary):interpolated: |
Awards Granted in Fiscal Years 2019 and 2020
| | | | |
| Adjusted 3-Year Average ROE | | RSU Vesting
Percentage | |
| |
³19% | | | 150 | % |
| |
16% | | | 125 | % |
| |
13% | | | 100 | % |
| |
10% | | | 75 | % |
| |
7% | | | 50 | % |
| |
<7% | | | 0 | % |
38 | Raymond James Financial, Inc. 2020 Proxy Statement
|
| |
| Awards Granted Prior to Fiscal Year 2016 and After Fiscal Year 2017 | |
| Adjusted 3-Year Average After-Tax ROE | RSU Vesting Percentage |
| ≥18% | 150% |
| 15% | 125% |
| 12% | 100% |
| 9% | 75% |
| 6% | 50% |
| <6% | 0% |
|
| |
| Awards Granted in Fiscal Years 2016 and 2017 | |
| Adjusted 3-Year Average After-Tax ROE | RSU Vesting Percentage |
| ≥17% | 150% |
| 14% | 125% |
| 11% | 100% |
| 8% | 75% |
| 5% | 50% |
| <5% | 0% |
Awards Granted in Fiscal Year 2018
| | | | |
| Adjusted 3-Year Average ROE | | RSU Vesting
Percentage | |
| |
³18% | | | 150 | % |
| |
15% | | | 125 | % |
| |
12% | | | 100 | % |
| |
9% | | | 75 | % |
| |
6% | | | 50 | % |
| |
<6% | | | 0 | % |
Awards Granted in Fiscal Year 2017
| | | | |
| Adjusted 3-Year Average ROE | | RSU Vesting
Percentage | |
| |
³17% | | | 150 | % |
| |
14% | | | 125 | % |
| |
11% | | | 100 | % |
| |
8% | | | 75 | % |
| |
5% | | | 50 | % |
| |
<5% | | | 0 | % |
Option Exercises and Stock Vested for Fiscal 20172019
The following table provides information about stock options exercised by the named executive officersNEOs during 2017fiscal 2019 and restricted stock unitRSU awards held by our named executive officersNEOs that vested in 2017.
|
| | | | | | |
| | Option Awards | | Stock Awards |
Name | Number of Shares Acquired on Exercise(1) | Value Realized On Exercise(2) | | Number of Shares Acquired on Vesting(3) | Value Realized On Vesting (4) | |
| Paul C. Reilly | 4,172 | $231,510 | | 32,484 | $2,304,878 | (5) |
| Jeffrey P. Julien | 14,255 | $1,197,900 | | 4,481 | $316,560 | (6) |
| John C. Carson, Jr. | — | — | | 9,676 | $683,561 | (7) |
| Jeffrey E. Trocin | 3,170 | $234,591 | | 8,658 | $611,644 | (8) |
| Dennis W. Zank | 15,000 | $458,765 | | 8,149 | $575,685 | (9) |
___________________
fiscal 2019.
| | | | | | | | | | | | | | | | |
| | | Option Awards | | | Stock Awards | |
| Name | | Number of Shares
Acquired on Exercise(1) | | | Value Realized
On Exercise(2) | | | Number of Shares
Acquired on Vesting(3) | | | Value Realized
On Vesting(4) | |
Paul C. Reilly | | | 24,890 | (5) | | $ | 651,915 | | | | 55,213 | (6) | | $ | 4,126,558(7 | ) |
Jeffrey P. Julien | | | 22,390 | | | $ | 553,390 | | | | 8,256 | | | $ | 626,072(8 | ) |
James E. Bunn | | | — | | | $ | — | | | | 12,369 | (9) | | $ | 924,270(10 | ) |
Scott A. Curtis | | | 6,503 | (11) | | $ | 223,945 | | | | 10,783 | (12) | | $ | 824,212(13 | ) |
Bella Loykhter Allaire | | | 30,316 | (14) | | $ | 809,273 | | | | 11,562 | (15) | | $ | 881,993(16 | ) |
| |
| (1) | Total number of shares underlying the options exercised during fiscal year 2017.2019. |
| |
| (2) | Amounts in this column reflect the difference between the market price on the date of exercise and the exercise price of the options exercised, multiplied by the number of options exercised. |
| |
| (3) | Total number of restricted stock unitsRSUs that vested during fiscal year 2017.2019. |
| |
| (4) | The value of the shares on each respective vesting date using the closing market price for our common stock. |
| |
| (5) | After disposition of a portion of the shares subject to the award back to the company to cover exercise price and/or taxes, the net number of shares issued was 5,509. |
| (6) | After disposition of a portion of the shares subject to the award back to the company to cover taxes, the net number of shares issued was 36,623. |
| (7) | 6,000 shares vested on November 21, 2016,18, 2018 when the closing price of our common stock was $72.32. 13,309$78.74. 2,000 shares vested on December 13, 2016,November 21, 2018 when the closing price of our common stock was $71.60. 13,175$76.10. 20,891 shares vested on January 3, 2017,December 15, 2018 when the closing price of our common stock was $69.68. |
| |
(6) | 2,252$74.34. 26,322 shares vested on December 13, 2016,January 2, 2019 when the closing price of our common stock was $71.60. 2,229$74.04. |
| (8) | 3,000 shares vested on January 3, 2017,November 18, 2018 when the closing price of our common stock was $69.68. |
| |
(7) | 4,863$78.74. 2,326 shares vested on December 13, 2016,15, 2018 when the closing price of our common stock was $71.60. 4,813$74.34. 2,930 shares vested on January 3, 2017,2, 2019 when the closing price of our common stock was $69.68.$74.04. |
Raymond James Financial, Inc. 2020 Proxy Statement | 39
| (9) | After disposition of a portion of the shares subject to the award back to the company to cover taxes, the net number of shares issued was 7,779. |
(8) | 4,351(10) | 840 shares vested on December 13, 2016,November 19, 2018 when the closing price of our common stock was $71.60. 4,307$77.91. 1,000 shares vested on January 3, 2017,November 21, 2018 when the closing price of our common stock was $69.68. |
| |
(9) | 4,095$76.10. 10,529 shares vested on December 13, 2016,15, 2018 when the closing price of our common stock was $71.60. 4,054$74.34. |
| (11) | After disposition of a portion of the shares subject to the award back to the company to cover exercise price and/or taxes, the net number of shares issued was 6,035. |
| (12) | After disposition of a portion of the shares subject to the award back to the company to cover taxes, the net number of shares issued was 7,785. |
| (13) | 4,500 shares vested on January 3, 2017,November 18, 2018 when the closing price of our common stock was $69.68.$78.74. 2,000 shares vested on November 21, 2018 when the closing price of our common stock was $76.10. 1,895 shares vested on December 15, 2018 when the closing price of our common stock was $74.34. 2,388 shares vested on January 2, 2019 when the closing price of our common stock was $74.04. |
| (14) | After disposition of a portion of the shares subject to the award back to the company to cover exercise price and/or taxes, the net number of shares issued was 8,296. |
| (15) | After disposition of a portion of the shares subject to the award back to the company to cover taxes, the net number of shares issued was 7,482. |
| (16) | 4,500 shares vested on November 18, 2018 when the closing price of our common stock was $78.74. 2,000 shares vested on November 21, 2018 when the closing price of our common stock was $76.10. 2,240 shares vested on December 15, 2018 when the closing price of our common stock was $74.34. 2,822 shares vested on January 02, 2019 when the closing price of our common stock was $74.04. |
Nonqualified Deferred Compensation for Fiscal 20172019
The following table provides information regarding our deferred compensation plans for our named executive officers,NEOs, which include the Long Term Incentive Plan (‘‘LTIP’’),LTIP, Deferred Management Bonus Plan (‘‘DMBP’’(“DMBP”), and the Voluntary Deferred Compensation Plan (‘‘VDCP’’) and the Restricted Cash Agreement (‘‘RCA’’(“VDCP”).
|
| | | | | | | | | | | | | | | | |
Name | Executive Contributions in Last Fiscal Year(1) | Registrant Contributions in Last Fiscal Year(2)(3) | Aggregate Earnings (Losses) in Last Fiscal Year(2) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last Fiscal Year-End |
| Paul C. Reilly | | | | | | |
| LTIP | $ | — |
| $ | 40,500 |
| $ | 26,985 |
| $ | 62,047 |
| $ | 232,771 |
| (4) |
| Jeffrey P. Julien | | | | | | |
| LTIP | $ | — |
| $ | 40,500 |
| $ | 66,125 |
| $ | — |
| $ | 541,071 |
| (4) |
| DMBP | $ | — |
| $ | — |
| $ | 279 |
| $ | — |
| $ | 279,467 |
| (5) |
| VDCP | $ | 100,000 |
| $ | — |
| $ | 895 |
| $ | — |
| $ | 307,167 |
| (6) |
| John C. Carson, Jr. | | | | | | |
| LTIP | $ | — |
| $ | 40,500 |
| $ | 21,606 |
| $ | — |
| $ | 179,824 |
| (4) |
| RCA | $ | — |
| $ | — |
| $ | 788 |
| $ | — |
| $ | 35,346 |
| (7) |
| Jeffrey E. Trocin | | | | | | |
| LTIP | $ | — |
| $ | 40,500 |
| $ | 102,549 |
| $ | — |
| $ | 802,881 |
| (4) |
| DMBP | $ | — |
| $ | — |
| $ | 315 |
| $ | — |
| $ | 315,037 |
| (5) |
| Dennis W. Zank | | | | | | |
| LTIP | $ | — |
| $ | 40,500 |
| $ | 26,985 |
| $ | 62,047 |
| $ | 232,771 |
| (4) |
| DMBP | $ | — |
| $ | — |
| $ | 360 |
| $ | — |
| $ | 360,481 |
| (5) |
___________________
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Executive
Contributions in
Last Fiscal Year(1) | | Registrant
Contributions in
Last Fiscal
Year(2)(3) | | Aggregate
Earnings(Losses)
In Last Fiscal
Year | | Aggregate
Withdrawals/ Distributions | | Aggregate
Balance at Last
Fiscal Year-end
(2019) |
Paul Reilly | | | | | | | | | | | | | | | | | | | | | | | $ | 245,461 | |
LTIP | | | | | | | | $ | 44,100 | | | | $ | 3,784 | | | | $ | 44,217 | | | | $ | 245,461 | (4) |
Jeffrey P. Julien | | | | | | | | | | | | | | | | | | | | | | | $ | 1,399,068 | |
LTIP | | | | | | | | $ | 44,100 | | | | $ | 15,420 | | | | $ | — | | | | $ | 698,023 | (4) |
DMBP | | | | | | | | $ | — | | | | $ | 701 | | | | $ | — | | | | $ | 281,287 | (5) |
VDCP | | | $ | — | | | | $ | — | | | | $ | 8,019 | | | | $ | — | | | | $ | 419,758 | (6) |
James E. Bunn | | | | | | | | | | | | | | | | | | | | | | | $ | 647,796 | |
LTIP | | | | | | | | $ | 44,100 | | | | $ | 10,259 | | | | $ | — | | | | $ | 433,449 | (4) |
VDCP | | | $ | 45,000 | | | | $ | — | | | | $ | 3,204 | | | | $ | — | | | | $ | 214,347 | (6) |
Scott Curtis | | | | | | | | | | | | | | | | | | | | | | | $ | 293,422 | |
LTIP | | | | | | | | $ | 44,100 | | | | $ | 7,528 | | | | $ | — | | | | $ | 293,422 | (4) |
Bella Loykhter Allaire | | | | | | | | | | | | | | | | | | | | | | | $ | 3,359,033 | |
LTIP | | | | | | | | $ | 44,100 | | | | $ | 3,784 | | | | $ | 44,217 | | | | $ | 245,461 | (4) |
VDCP | | | $ | — | | | | | | | | | $ | 212,864 | | | | $ | — | | | | $ | 3,113,572 | (6) |
| |
| (1) | The amounts presented are included in the BonusSalary column of the Summary Compensation Table and represent amounts earned with respect to the 2017 fiscal year but paidrepresents salary deferred in December 2017.January 2019 through September 2019. |
| |
| (2) | The amounts presented in these columns are included in the All Other Compensation table located below the footnotes to the Summary Compensation Table. |
| |
| (3) | Represents amounts earned with respect to the 20172019 fiscal year but contributed in December 2017.2019. |
| |
| (4) | The amounts presented include previously and currently reported compensation with respect to LTIP contributions made by us. The following amounts represent vested balances at September 30, 2017,2019: Mr. Reilly $52,948,$50,689, Mr. Julien $361,247,$503,251, Mr. Carson $0,Bunn $238,677, Mr. Trocin $802,881,Curtis $98,650 and Mr. Zank $52,948.Ms. Loykhter Allaire $50,689. |
| |
| (5) | The amounts presented include previously and currently reported compensation with respect to DMBP contributions made by us. The following amounts represent vested balances at September 30, 2017:2019: Mr. Julien $279,467, Mr. Trocin $315,037, and Mr. Zank $360,481.$281,287. |
40 | Raymond James Financial, Inc. 2020 Proxy Statement
| |
| (6) | The amount presented includes currently reported compensation with respect to VDCP contributions made by Mr. Julien.Julien, Mr. Bunn and Ms. Loykhter Allaire. The entire balance is vested as of September 30, 2017.2019. |
| |
(7) | The amount presented includes previously and currently reported compensation with respect to RCA contributions made by us. There is no vested balance as of September 30, 2017. |
Long Term Incentive Plan. Our LTIP, originally adopted effective October 1, 2000, is an unfundeda deferred compensation plan benefiting key management and other highly-compensated employees. Under the LTIP, we determine each year which employees will be participants for that plan year and then establish an account on our books for such year for each participant. Although we can elect to use other allocation formulas, historically, the allocations under the LTIP have been made based upon the individual participant’s level of compensation above a minimum, and not in excess of a maximum (for fiscal 2017,2019, these amounts were $265,000$275,000 and $865,000,$875,000, respectively). The CGN&C Committee or its designee then determines the percentage, if any, by which that compensation is multiplied to determine the contribution credited to each participant’s account for the particular plan year. Each account is thereafter credited (or debited), based upon the allocable share of the return that would have been earned (including any negative return) had all accounts been invested in a group of unaffiliated mutual funds and managed accounts. Senior management selects those mutual funds and managed accounts, pursuant to authority delegated by the CGN&C Committee. Annual allocations and their deemed earnings vest after five years, subject to earlier vesting in the case of death or disability. We pay the vested account balance in a cash lump sum after five years of credited service, subject to earlier payment in the case of death or disability, and subject to certain deferral rights that must be exercised at
least 12 months in advance of the account balance vesting. Because the account balances are unfunded, they represent only unsecured claims against the Company.
Deferred Management Bonus Plan. Our DMBP, originally adopted effective October 1, 1989, preceded the LTIP. The DMBP remains in effect to administer certain amounts credited prior to the adoption of the LTIP. The last bonus allocation that was made to the DMBP was with respect to fiscal year 1999. Since that time, additional amounts credited to the DMBP accounts have been based on a deemed interest return on the amounts in the respective DMBP accounts. Like the LTIP, the DMBP is an unfunded plan that was established to benefit key management and other highly compensated employees. For fiscal years 1990 through 1999, each participant’s account was credited with a contribution, if any, determined by us in a manner similar to the LTIP. During such period and thereafter, participants’ accounts have been credited with a deemed interest return, based upon the average annual interest rate payable by our broker-dealer affiliate on brokerage client account funds. Annual amounts credited to a participant’s account and the deemed interest vest ratably over an eight-year period, subject to earlier vesting in the case of death, disability, attaining age 65 or a qualified early retirement. We pay the vested account balance as soon as practical following death or disability and, in the case of normal retirement, as soon as practical after the end of the plan year in which retirement occurs following the participant’s attaining the age of 65. Other provisions apply in the case of early retirement. Because the account balances are unfunded, they represent only unsecured claims against the company.
Voluntary Deferred Compensation Plan. The VDCP was established effective January 1, 2013, for the purpose of offering a voluntary,pre-tax capital accumulation opportunity for a select group of highly compensated employees and independent contractors to defer compensation. The VDCP allows participants with annual calendar year compensation of $300,000 or more to defer up to 75% of base salary, bonuses and commissions, subject to certain minimums and maximums, and permits the company to make contributions at any time in its sole discretion. Balances of participants are deemed to be invested, at the election of the participant, in funds selected by the participant from a list chosen by the committee that administers the plan. Each year participants may elect to have that year’s deferrals distributed as a scheduledin-service withdrawal or upon retirement. All plan balances (deferrals, company contributions and earnings thereon) are unsecured liabilities of the company. (The Amended & Restated VDCP was filed as exhibit 10.14 to the company’s Annual Report on Form10-K filed with the SEC on November 22, 2016.)
Raymond James Financial, Inc. 2020 Proxy Statement | 41
The RCA was implemented in 2013 in connection with the company’s completion of its acquisition of Morgan Keegan in order to emulate the provisions of a program in place at Morgan Keegan prior to the transaction. Under the RCA, a cash amount is awarded and invested for five years, subject to forfeiture in the event of termination other than for death, disability or retirement. Mr. John C. Carson, Jr. is the only named executive officer who participates in the RCA.
Potential Payments Upon Termination or Change in Control for Fiscal 20172019
Except as described below, none of the named executive officersNEOs is a party to any agreement or arrangement with us providing for payments in connection with any termination, including resignation, severance or retirement, a change in such officer’s responsibilities, or a change in control of the company. The following tables summarize the estimated payments to be made under each agreement, plan or arrangement in effect as of September 30, 2017,2019, which provides for payments to a named executive officeran NEO at, following or in connection with a termination of employment or a change in control. However, in accordance with SEC regulations, we do not report any amount to be provided to a named executive officeran NEO under any arrangement which does not discriminate in scope, terms or operation in favor of our named executive officersNEOs and which is available generally to all salaried employees. In accordance with SEC regulations, this analysis assumes that the named executive officer’sNEOs’ date of termination is September 30, 2017,2019, and the price per share of our common stock on the date of termination is the closing price of our common stock on the NYSE onas of that date, which was $84.33.
|
| | | | | | | | | | | | | | |
Benefit and Payments Upon Termination | Voluntary Termination without Good Reason ($) | Termination by Executive for Good Reason or Involuntary Termination by the Company without Cause ($) | Involuntary Termination for Cause ($) | Retirement ($)(1) | Death or Disability ($) | Change in Control ($) | Qualified Termination Following Change in Control ($) |
| Salary Continuation | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Annual Cash Bonus | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Severance Payment | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Share Awards | 9,019,599 |
| 9,019,599 |
| — |
| 9,019,599 |
| 11,043,519 |
| — |
| 11,043,519 |
|
| Options | — |
| — |
| — |
| — |
| 657,300 |
| — |
| 507,555 |
|
| Welfare Benefits | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
___________________
(1) Mr. Reilly’s RSU stock bonus awards under the 2012 Plan contain an additional definition of ‘‘retirement’’ in order to conform with a definition used under the 2007 Stock Bonus Plan, which was in effect when Mr. Reilly was hired. Pursuant to such provision, ‘‘retirement’’ is defined as ending service after age 60 with 5 years of service.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Benefit and Payments Upon Termination | | Voluntary
Termination
without
Good
Reason ($) | | | Termination by
Executive for
Good Reason
or Involuntary Termination by
the Company
without Cause ($) | | | Involuntary
Termination
for Cause ($) | | | Retirement ($)(1) | | | Death or
Disability ($) | | | Change in
Control ($) | | | Qualified
Termination
Following
Change in
Control ($) | |
Salary Continuation | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Annual Cash Bonus | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Severance Payment | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Share Awards | | | 13,896,159 | | | | 13,896,159 | | | | — | | | | 13,896,159 | | | | 15,875,199 | | | | — | | | | 15,875,199 | |
Stock Options | | | — | | | | — | | | | — | | | | — | | | | 67,425 | | | | — | | | | 65,186 | |
Welfare Benefits | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
| (1) | Mr. Reilly’s RSU stock bonus awards and retention awards granted in November and December 2017 and 2018 under the 2012 Plan contain an additional definition of “retirement” in order to conform with a definition used under the 2007 Stock Bonus Plan, which was in effect when Mr. Reilly was hired. Pursuant to such provision, “retirement” is defined as ending service after age 60 with 5 years of service. |
Jeffrey P. Julien
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Benefit and Payments Upon Termination | | Voluntary
Termination
without
Good
Reason ($) | | | Termination by
Executive for
Good Reason
or Involuntary Termination by
the Company
without Cause ($) | | | Involuntary
Termination
for Cause ($) | | | Retirement ($) | | | Death or
Disability ($) | | | Change in
Control ($) | | | Qualified
Termination
Following
Change in
Control ($) | |
Salary Continuation | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Annual Cash Bonus | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Severance Payment | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Share Awards | | | 1,762,583 | | | | 1,762,583 | | | | — | | | | 1,762,583 | | | | 2,669,643 | | | | — | | | | 2,669,643 | |
Stock Options | | | — | | | | — | | | | — | | | | — | | | | 67,425 | | | | — | | | | 65,186 | |
Welfare Benefits | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
42 | Raymond James Financial, Inc. 2020 Proxy Statement
James E. Bunn
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Benefit and Payments Upon Termination | | Voluntary
Termination
without
Good
Reason ($) | | | Termination by
Executive for
Good Reason
or Involuntary Termination by
the Company
without Cause ($) | | | Involuntary
Termination
for Cause ($) | | | Retirement
($) | | | Death or
Disability ($) | | | Change in
Control ($) | | | Qualified
Termination
Following
Change in
Control ($) | |
Salary Continuation | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Annual Cash Bonus | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Severance Payment | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Share Awards | | | — | | | | 2,128,458 | | | | — | | | | — | | | | 3,493,995 | | | | — | | | | 3,493,995 | |
Stock Options | | | — | | | | — | | | | — | | | | — | | | | 26,970 | | | | — | | | | 26,080 | |
Welfare Benefits | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Scott A. Curtis
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Benefit and Payments Upon Termination | | Voluntary
Termination
without
Good
Reason ($) | | | Termination by
Executive for
Good Reason
or Involuntary Termination by
the Company
without Cause ($) | | | Involuntary
Termination
for Cause ($) | | | Retirement
($) | | | Death or
Disability ($) | | | Change in
Control ($) | | | Qualified
Termination
Following
Change in
Control ($) | |
Salary Continuation | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Annual Cash Bonus | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Severance Payment | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Share Awards | | | 1,264,194 | | | | 1,559,813 | | | | — | | | | 1,264,194 | | | | 2,549,333 | | | | — | | | | 2,549,333 | |
Stock Options | | | — | | | | — | | | | — | | | | — | | | | 67,425 | | | | — | | | | 65,186 | |
Welfare Benefits | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Bella Loykhter Allaire
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Benefit and Payments Upon Termination | | Voluntary
Termination
without
Good
Reason ($) | | | Termination by
Executive for
Good Reason
or Involuntary Termination by
the Company
without Cause ($) | | | Involuntary
Termination
for Cause ($) | | | Retirement
($) | | | Death or
Disability ($) | | | Change in
Control ($) | | | Qualified
Termination
Following
Change in
Control ($) | |
Salary Continuation | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Annual Cash Bonus | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Severance Payment | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Share Awards | | | 1,683,668 | | | | 1,683,668 | | | | — | | | | 1,683,668 | | | | 2,838,108 | | | | — | | | | 2,838,108 | |
Stock Options | | | — | | | | — | | | | — | | | | — | | | | 67,425 | | | | — | | | | 65,186 | |
Welfare Benefits | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | |
Raymond James Financial, Inc. 2020 Proxy Statement | 43
|
| | | | | | | | | | | | | | |
Benefit and Payments Upon Termination | Voluntary Termination without Good Reason ($) | Termination by Executive for Good Reason or Involuntary Termination by the Company without Cause ($) | Involuntary Termination for Cause ($) | Retirement ($) | Death or Disability ($) | Change in Control ($) | Qualified Termination Following Change in Control ($) |
| Salary Continuation | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Annual Cash Bonus | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Severance Payment | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Share Awards | 1,140,310 |
| 1,140,310 |
| — |
| 1,140,310 |
| 1,983,610 |
| — |
| 1,983,610 |
|
| Options | 116,150 |
| 116,150 |
| — |
| 116,150 |
| 657,300 |
| — |
| 507,555 |
|
| Welfare Benefits | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
John2019 CEO Pay Ratio
Set forth below is a reasonable estimate of the ratio of annual total compensation of Paul C. Carson, Jr.Reilly, our CEO, to the annual total compensation of our median employee, calculated in accordance with SEC rules. Since these rules allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their own individual circumstances, the ratio reported by us may not be comparable to the ratios reported by other companies.
As previously reported in the proxy statement for the annual meeting held on February 28, 2019, we applied the following steps to identify the median employee based on our total employee population as of July 1, 2018. We included all active full- and part-time employees on this date (other than our CEO) who had been employed by us at any time during calendar 2017. In accordance with SEC rules, we did not include independent contractors—thus, the financial advisors in our Raymond James Financial Services channel and their staffs were excluded. In addition, we excluded the followingnon-U.S. employees who, in the aggregate, constituted less than 5% of our total employee population (“de minimis exclusion”): all our employees in the United Kingdom (147), Germany (47) and France (43). Prior to applying thede minimis exclusion, our total employee population as of July 1, 2018 consisted of 12,406 persons, with 11,161 employees located in the U.S. and 1,245 outside the U.S. After applying thede minimis exclusion, our total employee population consisted of 11,161 employees in the U.S. and 1,008 employees outside the U.S.
To identify our median employee, we used a “gross taxable earnings” measure for calendar year 2017, which included: (i) annual base pay (salary or gross wages), (ii) commissions, (iii) bonuses, (iv) fringe benefits, (v) the value of equity awards that vested during the year, and (vi) miscellaneous taxable earnings. We annualized the base pay (only) for any employees who commenced work during calendar 2017, with certainnon-material exceptions. Compensation amounts were determined from our payroll systems of record. Payments in Canadian dollars were converted to U.S. dollars using a12-month average rate for the year. To identify our median employee, we then calculated the total gross taxable earnings for our employee population and excluded employees at the median who had anomalous compensation characteristics.
For fiscal 2019, we estimated the ratio of such median employee’s annual total compensation for fiscal 2019 to that of the CEO in accordance with SEC rules for the Summary Compensation Table, as follows:
the median of the annual total compensation of all employees (other than the CEO) was $94,864;
the annual total compensation of the CEO, as reported in the Summary Compensation Table, was $13,090,394; and
the ratio of the annual total compensation of the CEO to the median of the annual total compensation of all employees was 138 to 1.
|
| | | | | | | | | | | | | | |
Benefit and Payments Upon Termination | Voluntary Termination without Good Reason ($) | Termination by Executive for Good Reason or Involuntary Termination by the Company without Cause ($) | Involuntary Termination for Cause ($) | Retirement
($) | Death or Disability ($) | Change in Control ($) | Qualified Termination Following Change in Control ($) |
| Salary Continuation | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Annual Cash Bonus | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Severance Payment | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Share Awards | 1,899,112 |
| 1,899,112 |
| — |
| 1,899,112 |
| 2,742,412 |
| — |
| 2,742,412 |
|
| Options | — |
| — |
| — |
| — |
| 360,500 |
| — |
| 261,911 |
|
| Welfare Benefits | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
Jeffrey E. Trocin
|
| | | | | | | | | | | | | | |
Benefit and Payments Upon Termination | Voluntary Termination without Good Reason ($) | Termination by Executive for Good Reason or Involuntary Termination by the Company without Cause ($) | Involuntary Termination for Cause ($) | Retirement
($) | Death or Disability ($) | Change in Control ($) | Qualified Termination Following Change in Control ($) |
| Salary Continuation | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Annual Cash Bonus | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Severance Payment | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Share Awards | — |
| 2,147,379 |
| — |
| — |
| 2,990,679 |
| — |
| 2,990,679 |
|
| Options | — |
| — |
| — |
| — |
| 726,990 |
| — |
| 570,079 |
|
| Welfare Benefits | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
Dennis W. Zank
|
| | | | | | | | | | | | | | |
Benefit and Payments Upon Termination | Voluntary Termination without Good Reason ($) | Termination by Executive for Good Reason or Involuntary Termination by the Company without Cause ($) | Involuntary Termination for Cause ($) | Retirement
($) | Death or Disability ($) | Change in Control ($) | Qualified Termination Following Change in Control ($) |
| Salary Continuation | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Annual Cash Bonus | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Severance Payment | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Share Awards | 2,077,723 |
| 2,077,723 |
| — |
| 2,077,723 |
| 2,921,023 |
| — |
| 2,921,023 |
|
| Options | 116,150 |
| 116,150 |
| — |
| 116,150 |
| 657,300 |
| — |
| 507,555 |
|
| Welfare Benefits | — |
| — |
| — |
| — |
| — |
| — |
| — |
|
Report of the Corporate Governance, Nominating and Compensation Committee Report
The CGN&C Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this Proxy Statement. Based on this review and discussion, the CGN&C Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report.
Respectfully submitted by the CGN&C Committee
Gordon L. Johnson, Chairman
Jeffrey N. Edwards
Susan N. Story
44 | Raymond James Financial, Inc. 2020 Proxy Statement
Item 2. — Advisory Vote on Executive Compensation (“Say-on-Pay”)
|
| | | | | |
| | Robert P. Saltzman (Chairman) | Proposal Snapshot — Item 2. Say-on-Pay | | | | |
| Gordon L. Johnson | | | |
| Susan N. Story | What is being voted on: An advisory vote to approve the compensation of all of our NEOs. Board recommendation: Our Board unanimously recommends a vote FOR the resolution approving the executive compensation of our NEOs. | | |
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal year 2017, the following directors served as members of the CGN&C Committee: Robert P. Saltzman (Chairman), Gordon L. Johnson and Susan N. Story. No member of the CGN&C Committee wasWe are asking our shareholders to vote to approve, on an officer or employee of the company or any of its subsidiaries during 2017, and no member of the CGN&C Committee was formerly an officer of the company or any of its subsidiaries or was a party to any disclosable related person transaction involving the company. During 2017, none of the executive officers of the company has served on the board of directors or onadvisory (nonbinding) basis, the compensation committee of any other entity that has or had executive officers servingour NEOs as a member of the Board of Directors or CGN&C Committee of the company.
* * *
REPORT OF THE AUDIT AND RISK COMMITTEE
Members of the Audit and Risk Committee (the “A&R Committee”) have reviewed and discussed with management and with representatives of KPMG LLP the consolidated financial statements for fiscal 2017 containeddisclosed in our Annual Report on Form 10-K and the integrated audit of the consolidated financial statements and internal control over financial reporting for fiscal 2017. In addition, the A&R Committee reviewed with KPMG LLP the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board (‘‘PCAOB’’) and approved by the SEC. The A&R Committee also received the written disclosures and the letter from KPMG LLP required by the applicable requirements of the PCAOB regarding independent auditor communications with the A&R Committee concerning independence, and discussed with KPMG LLP their independence from us and our management, and considered their independence in connection with any non-audit services provided. The A&R Committee also reviewed with KPMG LLP our critical accounting policies and practices and certain written communications between KPMG LLP and our management.
Based on the reviews and discussions referred to above, and in reliance on the representations of management and the independent registered public accounting firm’s report with respect to the financial statements, the A&R Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for fiscal 2017 for filing with the SEC. The Board of Directors approved the recommendation.
Management is responsible for our financial statements and the financial reporting process, including our system of internal controls. Our independent registered public accounting firm is responsible for the integrated audit of the consolidated financial statements and internal control over financial reportingthis proxy statement in accordance with the standards ofSEC’s rules. This proposal, commonly known as a“say-on-pay” proposal, gives our shareholders the PCAOB. The firm issues reportsopportunity to express their views on our consolidated financial statements and the effectiveness of internal control over financial reporting.
The A&R Committee members are not professional accountants or auditors, and their functions areNEOs’ compensation. This vote is not intended to
duplicate or to certifyaddress any specific item of compensation, but rather the
activitiesoverall compensation of
managementour NEOs and the
independent registered public accounting firm. The A&R Committee serves a board-level oversight role,philosophy, policies and practices described in
which it provides advice, counselthis proxy statement.Accordingly, we are asking you to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the Company’s shareholders approve, on an advisory(non-binding) basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2020 Annual Meeting of Shareholders pursuant to the SEC’s compensation disclosure rules, including the Compensation Discussion and direction to managementAnalysis, the compensation tables and the independent registered public accounting firmrelated narrative discussion.”
Thesay-on-pay vote is advisory, and therefore not binding on the basis ofCompany, the information it receives, discussions with managementCGN&C Committee or our Board. Our Board and CGN&C Committee value the independent registered public accounting firm, and the experience of the A&R Committee’s members in business, financial and accounting matters. In its oversight role, the A&R Committee relies on the work and assurancesopinions of our management, which hasshareholders, and—to the primary responsibility for financial statementsextent there is any significant vote against the NEO compensation as disclosed in this proxy statement—we will consider our shareholders’ concerns and reports, and ofevaluate whether any actions are necessary to address those concerns. Under the independent registered public accounting firm, who, in their report, expressBoard’s current policy, shareholders are given an opinionopportunity to cast an advisory vote on the conformity of our annual financial statements with U.S. generally accepted accounting principles.
|
| |
| Benjamin C. Esty, Chair |
| Charles G. von Arentschildt |
| Shelley G. Broader |
| Jeffrey N. Edwards |
| Roderick C. McGeary |
FEES PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit and Risk Committee of the Board,this topic annually, with the
approvalnext opportunity occurring in connection with the company’s annual meeting of
shareholders in 2021.Raymond James Financial, Inc. 2020 Proxy Statement | 45
Relationships and Related Transactions
Introduction. In this section we disclose transactions involving the shareholders, engaged KPMG to perform an annual auditcompany where the amount involved exceeds $120,000 and any of the company’s consolidated financial statements for“related persons” has a direct or indirect material interest. As defined by SEC rules, related persons include our executive officers, directors, holders of more than five percent (5%) of our voting securities, immediate family members of the foregoing, and certain associated entities. SEC rules require that we disclose all such “related person transactions” that occurred since the beginning of our last completed fiscal year 2017. The following table sets forth the approximate aggregate fees billed or expected to be billed(October 1, 2018) to the company by KPMG for fiscal years 2017 and 2016 forfiling date of this Proxy Statement, as well as any currently proposed transactions. We refer to this period below as the audit“reporting period.” Accordingly, the dollar amounts set forth in this section, including compensation of the company’s annual consolidated financial statements and for other services rendered by KPMG.
|
| | | | | |
| | Fiscal Year |
| | 2017 | | 2016 |
| | | ($) | |
Audit Fees(1) | 5,512,490 |
| | 4,155,647 |
|
Audit-Related Fees(2) | 676,971 |
| | 803,760 |
|
Tax Fees(3) | 475,019 |
| | 550,500 |
|
All Other Fees(4) | 6,699 |
| | 134,342 |
|
| Total Fees | 6,671,179 |
| | 5,644,249 |
|
____________
| |
(1) | Audit Fees represents fees for the audit of the company’s consolidated and subsidiary financial statements. |
| |
(2) | Audit-Related Fees consist primarily of fees for custody rule examinations of registered investment advisors, including the issuance of an independent auditors report on controls over custody operations, an examination to report on controls applicable to our “e-folio” fixed income client application, FICCA attestations for our mutual fund customers and HUD attestations for RJ Bank. Audit-Related Fees also include fees for comfort letters for debt offerings. |
| |
(3) | Tax Fees includes tax compliance and consulting services related to federal and state tax returns. |
| |
(4) | All Other Fees consist principally of due diligence fees related to acquisitions. |
The Audit and Risk Committee has adopted a policy that it must specifically pre-approve all audit and non-audit services provided by our independent auditors.
All audit and non-audit services provided to the company and its subsidiaries by KPMG duringcertain individuals, do not reflect past fiscal year 2017 were specifically approved.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
amounts only, but may include multiple annual bonus payments as well as certain future proposed payments.Bank Transactions.In the ordinary course of our business, we make bank loans to, and hold bank deposits for, certain of our officers and directors, and also extend margin credit in connection with the purchase of securities to certain of our officers and directors who are affiliated with one of our broker-dealers, as permitted under applicable law, including the Sarbanes-Oxley Act (‘‘SOX’’(“SOX”). In addition, Raymond James Bank, N.A., a subsidiary of the company (“RJ Bank”), has extended credit in the form of a term loan to Tech Data Corporation (“TECD”), a publicly traded company of which Mr. Dutkowsky is the executive chairman. RJ Bank has also extended credit to U.S. Foods Corporation, a publicly traded company at which Mr. Dutkowsky is a member of the board and the lead independent director. (Other than in his capacities as executive chairman of TECD and director of U.S. Foods, Mr. Dutkowsky has no direct or indirect interest in these transactions.) These transactions have been made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions withnon-affiliated persons, and do not involve more than normal risk of collectability or present other unfavorable features. We also, from time to time and in the ordinary course of our business, enter into transactions involving the purchase or sale of securities as principal from, or to, directors, officers and employees and accounts in which they have an interest. These purchases and sales of securities on a principal basis are effected on substantially the same terms as similar transactions with unaffiliated third parties.
Investments.We have from time to time established private investment funds to permit certain officers to participate in our merchant banking, venture capital and other similar activities by investing alongside the funds that we raise and manage fornon-employee investors. Trusts benefiting family members of these officers have also invested in these funds. In addition, certain of our directors and executive officers from time to time may invest their personal monies in funds managed by our subsidiaries on substantially the same terms and conditions as other similarly situated investors in these funds who are neither directors nor officers. The only directors, executive officers or affiliated entities who received distributions of profits earned on investments made by, and other income from, any affiliated fund during the period reported on in an amount exceeding $120,000 in the aggregate was aA family trust affiliated with Mr. Francis S. Godbold, which, in the aggregate, received $150,237. In addition, each of Mr. Tom James, our Chairman Emeritus, invested a total of $207,816 in SLG Partners, L.P., a fund affiliated with the company, during the reporting period. Mr. Dutkowsky and Mr. Paul Reilly, our Chairman and Chief Executive Officer, maintains a Separate Managed Accounthis immediate family members maintain investment accounts with ClariVest Asset Management LLC, an affiliatethe Company in respect of which they paid fees to the company. During fiscal 2018, Mr. James purchased or will purchase anCompany in the aggregate amount of approximately $228,570 during the period since October 1, 2018.
$2 million, and Mr. Reilly purchased or will purchase an aggregate of approximately $1 million, in securities in such accounts.
Share Repurchases.In order to pay (i) the exercise price of options and (ii) withholding or other similar taxes due in connection with the vesting of equity awards granted under the Amended and Restated 2012 Equity Incentive Plan and our prior similar plans, employee participants, including our named executive officers,NEOs, may elect the ‘‘swap’’“swap” method whereby the participant delivers to the company shares equal in value to the required exercise price or tax withholding liability in connection with the exercise or vesting of such equity awards. Under the ‘‘swap’’“swap” method, the price per share paid by the company for repurchases is the closing price of the company’s shares on the NYSE on the date the participant’s exercise request is submitted.
46 | Raymond James Financial, Inc. 2020 Proxy Statement
During fiscal 2017,the reporting period, the company repurchased shares from the directors or executive officers in amounts exceeding the disclosure threshold for the aggregate consideration shown in the following table:
|
| | |
| Name and Title | Number of Shares Repurchased (#) | Aggregate Consideration ($) |
| Bella L. Allaire | 3,807 | 270,944 |
| Paul D. Allison | 4,619 | 338,711 |
| Jeffrey A. Dowdle | 3,695 | 270,954 |
| Jeffrey P. Julien | — | — |
| Paul C. Reilly | — | — |
| | | | | | | | |
| Name and Title | | Number of Shares Repurchased (#) | | | Aggregate Consideration ($) | |
Jennifer C. Ackart, Senior Vice President, Controller and Chief Accounting Officer | | | 1,378 | | | | 122,600 | |
Paul D. Allison, Chairman, President and CEO—Raymond James Ltd. | | | 5,582 | | | | 473,353 | |
Jeffrey A. Dowdle, Chief Operating Officer | | | 2,085 | | | | 186,169 | |
Other Matters. Art Collection.Thomas A. and Mary James permit us to display over 2,7002,400 pieces from their nationally known art collection throughout the Raymond James home office complex, without charge to us. In return, we bear the cost of insurance and the direct and overhead costs of threetwo full-time staff persons whopersons. They serve as curators for the collection, conduct tours and coordinate special events. These staffThey also provide services, including selection of works of art and planning of initial exhibitions, tocollaborate with The James Museum of Western & Wildlife Art, a public art museum sponsoredfounded by Mr. James, that is expected to open in 2018 (“James Museum”). Such staff are also coordinatingcoordinate special exhibitions and the transportationborrowing from and acquisition of approximately 300 selectedworks of art works from our offices tofor the James Museum.collection. The art collection at our corporate headquarters is a marketing attraction for businesses and other organizations, and we provide regular tours for clients, local schools, business groups and nonprofit organizations.organizations and the community at large. The total cost to us for these items during the reporting period reported on was approximately $397,466.$217,179.
Employment Relationships.
Certain family members of our directors or executive officers are employed by the company and/or affiliated with certain of its subsidiaries. The following paragraph sets forth certain information about these relationships during the reporting period.As explained above, the individual compensation amounts set forth below cover a “reporting period” that is greater than a fiscal year and may include two annual bonus cycles.Courtland James, athe son of Thomas A. James, is employedserved as an Executive Vice PresidentEVP of New Business Development for Eagle Asset Management, Inc., a subsidiary of the company. He was paidCarillon Tower Advisers, retiring on September 30, 2019. Courtland James earned cash compensation during the period reported on of $1,203,334 and equity award compensation in the form of Restricted Stock Units in the aggregate grant date value of $124,970. Huntington James, a son of Thomas A. James, is employed in a non-executive position by us. He was paid cash compensation during the period reported on of $268,973.$1,546,167. Mr. Donald Blair, the son-in-law of Francis S. Godbold, is an investment banker with our subsidiaryat Raymond James & Associates, Inc. (“RJ&A”). He was paid, who earned cash compensation during the period reported on of $1,804,577$1,434,833 and equity award compensationreceived RSUs in the formamount of Restricted Stock Units in the aggregate grant date value of $100,000.$55,000. Karen Julien, the wifespouse of Jeffrey P. Julien, is employed by RJ&Aserved as a branch manager. During the period reportedmanager of RJ&A, retiring on she was paidMarch 29, 2019. Ms. Julien earned cash compensation in the aggregate amount of $258,097.$163,046. Matthew Frey, the son-in-law of Paul C. Reilly, is aan independent branch owner, manager of one of the independent branches of our subsidiaryand financial adviser affiliated with Raymond James Financial Services, Inc. He was paidand earned cash compensation during(net of ordinary course fees to the period reported oncompany) of $536,628.
Mr.$912,486 out of which he pays all general office expenses, payroll and other costs of branch operations, and splits net earnings with his partner. Francis S. Godbold,
oura director and Vice Chairman
and a director,of the company, earned cash compensation of $164,838. (Mr. Godbold is compensated as an employee and does not receive any additional compensation for his services as a director.
He was paid) Matthew Dowdle, the son of Jeffrey Dowdle, serves as Portfolio Consultant, Assistant Vice President, with RJ&A, and earned cash compensation
duringof $132,819.Transactions with 5% Shareholders. We and our affiliates engage in ordinary course trading, arrangements relating to the period reportedplacement of investment funds and ETFs on our Private Client Group platform, or other transactions or arrangements with, and may from time to time provide other ordinary course investment banking or other financial services to, The Vanguard Group and its affiliates, related entities and clients. These transactions are negotiated onarm’s-length bases and contain customary terms and conditions. The Vanguard Group is an investment manager or sponsor to mutual funds and ETFs that are investment options in our 401(k) Plan. The selection of the amountVanguard mutual funds or ETFs as investment options is unrelated to Vanguard’s common stock ownership. We believe that the fees paid to The Vanguard Group through the Vanguard mutual funds and ETFs are the same as the fees that are paid by the other holders of $160,777.the same share class of those funds.
Raymond James Financial, Inc. 2020 Proxy Statement | 47
We and our affiliates engage in ordinary course trading, arrangements relating to the placement of investment funds and ETFs on our Private Client Group platform, and other transactions or arrangements with, and may from time to time provide other ordinary course investment banking or other financial services to, BlackRock, Inc. and its affiliates, related entities and clients. These transactions are negotiated on arm’s–length bases and contain customary terms and conditions.
RELATED PERSON TRANSACTION POLICY
Related Person Transaction PolicyThe CGN&C Committee maintains Policies and Procedures with Respect to Related Person Transactions to address the review, approval, disapproval or ratification of related person transactions. ‘‘Related persons’’“Related persons” include the company’s
executive officers, directors, director nominees, holders of more than five percent (5%) of the company’s voting securities, immediate family members of the foregoing persons, andcompany’s: | | | | |
• executive officers • holders of more than 5% of the company’s voting securities • directors | | • immediate family members of the foregoing persons • director nominees | | • any entity in which any of the foregoing persons is employed, is a partner or is in a similar position, or in which such a person has a 5% or greater ownership interest or that is otherwise under the “control’ of such person |
A “related person has a 5% or greater ownership interest. A ‘‘related person transaction’’transaction” means (with certain exceptions permitted by SEC rules) a transaction or series of transactions in which the company participates, the amount involved exceeds $120,000, and a related person has a direct or indirect interest (with certain exceptions permitted by SEC rules). which:
| | | | |
• the company participates | | • amount involved exceeds $120,000 | | • related person has a direct or indirect material interest |
Examples might include sales, purchases and transfers of real or personal property, use of property and equipment by lease or otherwise, services received or furnished and borrowings and lendings, including guarantees.
Management is required to present for the approval or ratification of the CGN&C Committee all material information regarding an actual or potential related person transaction. The policy requires that, after reviewing such information, the disinterested members of the CGN&C Committee will approve or disapprove the transaction. Approval will be given only if the CGN&C Committee determines that such transaction is in, or is not inconsistent with, the best interests of the company and its shareholders. The policy further requires that in the event management becomes aware of a related person transaction that has not been previously approved or ratified, it must be submitted to the CGN&C Committee promptly. The policy also permits the chairman of the CGN&C Committee to review and approve related person transactions in accordance with the terms of the policy between scheduled committee meetings. Any determination made pursuant to this delegated authority must be reported to the full CGN&C Committee at the next regularly-scheduled meeting.
48 | Raymond James Financial, Inc. 2020 Proxy Statement
EQUITY COMPENSATION PLAN INFORMATION
Equity Compensation Plan InformationThe following table summarizes equity compensation plan information for the plans approved by shareholders, as a group, and for the plans not approved by shareholders, as a group, in each case as of September 30, 2017.2019. In accordance with SEC rules, the table below does not include our Profit Sharing Plan and Employee Stock Ownership Plan.
|
| | | | | |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights(1) (b) | Number of securities remaining available for future issuance under equity compensation plans. (Excludes securities reflected in column (a)) (c) |
Equity compensation plans approved by shareholders(2) | 3,084,790 | $51.74 | 16,158,903 |
| (3) |
Equity compensation plans not approved by shareholders(4) | 0 | $0.00 | — |
| |
| Total | 3,084,790 | $51.74 | 16,158,903 |
| |
_______________
Plan (ESOP). | | | | | | | | | | | | | | | |
Plan Category | | (a) Number of securities to be
issued upon exercise of
outstanding, options,
warrants and rights | | Weighted-average
exercise price of
outstanding options,
warrants and rights(1) | | Number of securities
remaining available for future issuance under equity compensation plans (excludes securities reflected in column (a)) |
Equity compensation plans approved by shareholders(2) | | | | 1,580,406 | | | | $ | 57.81 | | | | | 12,262,291 | (3) |
Equity compensation plans not approved by shareholders(4) | | | | — | | | | $ | — | | | | | — | |
Total | | | | 1,580,406 | | | | $ | 57.81 | | | | | 12,262,291 | |
| |
| (1) | The weighted-average exercise price does not take into account the shares or restricted stock units issued under our restricted stock and employee stock purchase plans, which have no exercise price. |
| |
| (2) | On February 23, 2012, the 2012 Stock Incentive Plan (as subsequently amended and restated, the ‘‘2012 Plan’’“2012 Plan”) was approved by our shareholders. The 2012 Plan serves as the successor to our 1996 Stock Option Plan for Key Management Personnel, 2007 Stock Option Plan for Independentindependent Contractors, 2002 Incentive Stock Option Plan, Stock Option Plan for Outside Directors, 2005 Restricted Stock Plan and 2007 Stock Bonus Plan (the ‘‘Predecessor Plans’’“Predecessor Plans”). Upon the original approval of the 2012 Plan by our shareholders, the Predecessor Plans terminated (except with respect to awards previously granted under the Predecessor Plans that remainedremain outstanding). Upon the original approval ofUnder the 2012 Plan our shareholders also approved thewe may grant of 15,400,000 new shares in addition to the shares then available for grant under the Predecessor Plans. On February 23, 2016, our shareholders approved the Amended and Restated 2012 Stock Incentive Plan, which included an increase of 16,000,000 shares available for issuance under the plan. |
| |
| (3) | Includes 15,297,1178,159,735 shares remaining available for issuance under the 2012 Plan and 861,7864,102,556 shares remaining available for issuance under the 2003 Employee Stock Purchase Plan, as amended, as of September 30, 2017.2019. |
| |
| (4) | We have two Predecessor Plans that were not previously approved by shareholders: the 1996 Stock Option Plan for Key Management Personnel and the Stock Option Plan for Outside Directors. All previously outstanding shares have been exercised or otherwise disposed of. |
Raymond James Financial, Inc. 2020 Proxy Statement | 49
Item 3.—Amended and Restated 2012 Stock Incentive Plan
| | | | | | |
| | Proposal Snapshot — Item 3. Approval of the Amended and Restated 2012 Stock Incentive Plan | | | | |
| | | | |
| | What is being voted on: Approval of the Amended and Restated 2012 Stock Incentive Plan. Board recommendation: Our Board unanimously recommends a vote FOR approval of our Amended and Restated 2012 Stock Incentive Plan. | | |
Background
We are asking the company’s shareholders to approve an amendment and restatement of the Company’s 2012 Stock Incentive Plan (the “2012 Plan”) as the Amended and Restated 2012 Stock Incentive Plan (the “A&R Plan”) in order to increase the maximum number of shares of the company’s common stock authorized for issuance over the term of the A&R Plan by 12,000,000 shares from 40,243,944 shares to 52,243,944 shares.
As of December 16, 2019, 19,852,607 shares had been issued under the 2012 Plan, 38,749,797 shares were subject to options and other awards under the 2012 Plan, and only 3,945,564 shares remained available for the grant of awards under the 2012 Plan. All other provisions of the 2012 Plan will remain in full force and effect under the A&R Plan.
The amendment and restatement of the 2012 Plan for which shareholder approval is sought under this Proposal No. 3 was adopted by the company’s Board on November 21, 2019, subject to and effective upon shareholder approval.
Purpose of the A&R Plan
The purpose of the A&R Plan is to attract, motivate and retain our directors, employees and independent contractors and to provide an incentive to increase long-term shareholder value. We believe that equity is a key element of our compensation package and that equity awards encourage employee loyalty and align employee interests directly with those of our shareholders. The A&R Plan has allowed us to provide our employees with equity-based incentive awards andnon-equity based compensation that are competitive with those of companies with which we compete for talent. The A&R Plan includes a variety of forms of awards, including restricted stock units, stock appreciation rights, restricted stock, stock options, dividend equivalents and cash awards, to allow the company to adapt its incentive compensation program to meet its needs in the changing business environment in which it operates.
Purpose of Increasing the Number of Shares Reserved
The A&R Plan is our sole plan for providing equity incentive compensation to eligible directors, employees and independent contractors. The A&R Plan is a vital component of our compensation programs, and increasing the number of shares of common stock that may be issued under equity awards ensures that we have an adequate reserve of shares available for issuance in order to attract, motivate and retain personnel and to provide an incentive to increase long-term shareholder value. The Board believes that equity and cash awards motivate high levels of performance, align the interests of our personnel and shareholders by giving directors, employees and independent contractors the perspective of an “owner” with an equity stake in the company, and provide an effective means of recognizing their contributions to our success. The Board believes that the ability to grant equity and cash award is a competitive necessity in our industry, and that such awards are essential to recruiting and retaining highly successful financial advisor “producers” and other key personnel who help us meet our goals, as well as rewarding and encouraging current directors, employees and independent contractors. We believe that the ability to grant equity and cash awards will continue to be important to the future success of the Company. If the A&R Plan is not approved and we are unable to grant equity compensation in the future, we may need to consider other compensation alternatives, such as increasing cash compensation.
50 | Raymond James Financial, Inc. 2020 Proxy Statement
How the Proposed Increase Was Determined
The Board, based on the recommendation of the CGN&C Committee, is recommending that shareholders approve an additional 12,000,000 shares of common stock under the A&R Plan. The CGN&C Committee, which administers the A&R Plan, has exercised its business judgment in concluding that increasing the number of shares of common stock reserved under the A&R Plan is in the company’s best interests. In reaching its decision, the CGN&C Committee considered the limits recommended by independent shareholder advisory groups, such as Institutional Shareholder Services (“ISS”), and determined a number that it believes complies with ISS’s guidelines while providing the company with a sufficient share reserve to cover the awards we anticipate granting to eligible participants for approximately three (3) years, although the actual number of shares utilized will depend on a variety of factors. Therefore, if shareholders approve the A&R Plan, the company currently expects that it will not ask shareholders to approve additional shares for the A&R Plan until at least the 2023 Annual Meeting of Shareholders. The company is committed to effectively managing our equity compensation share reserve while minimizing stockholder dilution.
A summary of the material terms and conditions of the A&R Plan, as amended and restated, is set forth below. This summary, however, does not purport to be a complete description of all provisions of the plan and is qualified in its entirety by reference to the A&R Plan, a copy of which is attached to this Proxy Statement as Appendix A. Capitalized terms used but not defined herein have the meanings given them in the A&R Plan.
Summary of the A&R Plan
Share Reserve. The maximum aggregate number of shares of the company’s common stock which may be issued under the 2012 Plan is currently 40,243,944 shares, subject to adjustment in the event of a stock split, stock or other extraordinary dividend, or other similar change in the common stock or capital structure of the company. If this proposal is approved by the company’s shareholders, this maximum aggregate amount will be increased by 12,000,000 shares to 52,243,944 shares, and the A&R Plan would then have approximately 15,945,564 shares available for grant.
Share Counting.Each share issued in connection with an award granted under the A&R Plan other than stock options and stock appreciation rights will be counted against the A&R Plan’s share reserve as 2.8 shares for every one share issued in connection with such award (and shall be counted as 2.8 shares for every one share that is returned or deemed not to have been issued from the A&R Plan).
Administration. The CGN&C Committee (the “Administrator”) will administer our A&R Plan. With respect to grants to officers and directors or awards intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Administrator will be constituted in such a manner as to satisfy applicable laws, including Section 162(m) of the Code and Rule16b-3 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”).
NoRe-pricings or Exchanges without Shareholder Approval. The company shall obtain shareholder approval prior to (a) the reduction of the exercise price of any stock option or the base appreciation amount of any stock appreciation right awarded under the A&R Plan or (b) the cancellation of a stock option or stock appreciation right at a time when its exercise price or base appreciation amount exceeds the fair market value of the underlying shares, in exchange for another stock option, stock appreciation right, restricted stock, cash buyout or other award (unless the cancellation and exchange occurs in connection with a Corporate Transaction). Notwithstanding the foregoing, cancelling a stock option or stock appreciation right in exchange for another stock option, stock appreciation right, restricted stock, or other award with an exercise price, purchase price or base appreciation amount that is equal to or greater than the exercise price or base appreciation amount of the original stock option or stock appreciation right will not be subject to shareholder approval.
Raymond James Financial, Inc. 2020 Proxy Statement | 51
SECTIONTerms and Conditions of Awards; Eligibility. The A&R Plan provides for the grant of restricted stock, restricted stock units, stock options, dividend equivalent rights, stock appreciation rights and cash awards (collectively referred to as “awards”). The classes of persons who are eligible to participate in the A&R Plan are the directors, employees (including executive officers) and independent contractors of the Company and its related entities. Stock options granted under the A&R Plan may be either incentive stock options under the provisions of Section 422 of the Internal Revenue Code (“Code”), ornon-qualified stock options. Incentive stock options may be granted only to employees. Awards other than incentive stock options may be granted to our employees, independent contractors and directors, or to employees, independent contractors and directors of our related entities. As of February 20, 2020, we expect that nine (9) directors (excluding our three employee directors) will be eligible to participate in the A&R Plan, and approximately 13,609 employees (including three employee directors and our executive officers) and approximately 12,532 independent contractors will be eligible to receive awards under the A&R Plan. To the extent that the aggregate fair market value of the shares subject to stock options designated as incentive stock options which become exercisable for the first time by a participant during any calendar year exceeds $100,000, such excess stock options shall be treated asnon-qualified stock options. Under the A&R Plan, awards may be granted to such employees, independent contractors or directors who are residing innon-U.S. jurisdictions as the Administrator may determine from time to time. Each award granted under the A&R Plan shall be designated in an award agreement.
The basis for participation in the A&R Plan is the Administrator’s decision, in its sole discretion, that an award to an eligible participant will further the plan’s purposes. In exercising its discretion, the Administration will consider the recommendations of management and the purposes of the A&R Plan, which are to attract and retain the best available personnel, to provide additional incentives to employees,non-executive directors, and independent contractors and to promote the success of the Company’s business. Under the 2012 Plan, in most cases, awards have been structured to vest solely over time in order to help retain the recipients. In addition, the Administrator may also make performance-based awards that will vest over time but only upon achievement of one or more performance criteria. In recent years, all eligible directors (including bothnon-executive directors and employee directors) and less than 15% of employees and 3% of independent contractors have received awards under the 2012 Plan.
Subject to applicable laws, the Administrator has the authority, in its discretion, to select employees, independent contractors and directors to whom awards may be granted from time to time, to determine whether and to what extent awards are granted, to determine the number of shares or the amount of other consideration to be covered by each award (subject to the limitations set forth below), to approve award agreements for use under the A&R Plan, to determine the terms and conditions of any award (including the vesting schedule applicable to the award), to amend the terms of any outstanding award granted under the A&R Plan (subject to the limitations described above), to construe and interpret the terms of the A&R Plan and awards granted, to establish additional terms, conditions, rules or procedures to accommodate the rules or laws of applicablenon-U.S. jurisdictions, to establish or cause to be established a trust for the purpose of purchasing shares on the open market, holding such shares and using such shares to satisfy the Company’s obligations with respect to grants of restricted stock units to participants resident in Canada, and to take such other actions, not inconsistent with the terms of the A&R Plan, as the Administrator deems appropriate.
The term of any award granted under the A&R Plan will be stated in the applicable award agreement, provided that the term of a stock option or stock appreciation right may not exceed seven (7) years (or five (5) years in the case of an incentive stock option granted to any participant who owns stock representing more than 10% of our combined voting power or of any parent or subsidiary of us) and the term of an award other than a stock option or stock appreciation right may not exceed ten (10) years. Notwithstanding the foregoing, the term of an award shall not include any period
52 | Raymond James Financial, Inc. 2020 Proxy Statement
for which the participant has elected to defer the receipt of the shares or cash issuable pursuant to the award under a deferral program the Administrator may establish in its discretion.
The A&R Plan authorizes the Administrator to grant incentive stock options at an exercise price not less than 100% of the fair market value of our common stock on the date the stock option is granted (or 110%, in the case of an incentive stock option granted to any employee who owns stock representing more than 10% of our combined voting power or any parent or subsidiary of us). In the case ofnon-qualified stock options, stock appreciation rights, and awards intended to qualify as performance-based compensation, the exercise price, base appreciation amount or purchase price, if any, shall be not less than 100% of the fair market value per share on the date of grant. In the case of all other awards granted under the A&R Plan, the exercise or purchase price shall be determined by the Administrator. In the case of an award other than an incentive stock option, the exercise or purchase price is generally payable in cash through the participant’s Raymond James brokerage account, in shares, or, with respect to stock options (other than incentive stock options), payment through a broker-dealer sale and remittance procedure or “net exercise” procedure. In the case of an incentive stock option, the exercise price is generally payable in cash through the participant’s Raymond James brokerage account or in shares.
Under the A&R Plan, the Administrator may establish one or more programs to permit selected participants the opportunity to elect to defer receipt of consideration payable under an award. The Administrator may also establish under the A&R Plan separate programs for the grant of particular forms of awards to one or more classes of participants.
Dividends and Dividend Equivalent Rights.During the vesting period for an award, dividends and dividend equivalent rights on the underlying shares of common stock shall be automatically retained by the Company (and not paid out to participants), subject to the vesting of the restricted stock and restricted stock units that are subject to performance vesting. Further, no dividends or dividend equivalent rights will be paid for stock options or stock appreciation rights.
Individual Limits. The maximum number of shares with respect to which stock options and stock appreciation rights may be granted to a participant in each successive twelve (12) month period is 200,000 shares. In connection with the participant’s commencement of service, he or she may be granted stock options and stock appreciation rights for up to a maximum of 400,000 shares. The foregoing limitations shall be adjusted proportionately by the Administrator in the event of a stock split, reverse stock split, stock dividend, combination or reclassification of shares or other similar change in our shares or our capital structure.
For awards of restricted stock and restricted stock units, with respect to each successive twelve (12) month period, the maximum number of shares that may be issued to a participant pursuant to such awards shall be 200,000 shares. In connection with a participant’s commencement of service, up to a maximum of 400,000 shares may be issued to the participant with respect to a twelve (12) month period relating to such commencement. The foregoing limitations shall be adjusted proportionately by the Administrator in the event of a stock split, reverse stock split, stock dividend, combination or reclassification of shares or other similar change in our shares or our capital structure.
For cash awards, with respect to each successive twelve (12) month period, the maximum amount that may be paid to a participant pursuant to such awards shall be $5,000,000. The foregoing limitation shall be adjusted proportionately by the Administrator in the event of a stock split, reverse stock split, stock dividend, combination or reclassification of shares or other similar change in our shares or our capital structure.
Raymond James Financial, Inc. 2020 Proxy Statement | 53
Transferability of Awards. Our A&R Plan allows for the transfer of awards under the A&R Plan only (i) by will or (ii) by the laws of descent and distribution. Only the recipient of an award may exercise such award during his or her lifetime.
Certain Adjustments. Subject to any required action by the shareholders of the company, the number of shares covered by outstanding awards, the number of shares that have been authorized for issuance under the A&R Plan, the exercise or purchase price of each outstanding award, the maximum number of shares or amount that may be granted subject to awards to any participant, and the like, shall be proportionally adjusted by the Administrator in the event of (i) any increase or decrease in the number of issued shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification or similar event affecting the shares, (ii) any other increase or decrease in the number of issued shares effected without receipt of consideration by the company or (iii) any other transaction with respect to our shares including a corporate merger, consolidation, acquisition of property or stock, separation (including aspin-off or other distribution of stock or property), reorganization, liquidation (whether partial or complete), distribution of cash or other assets to shareholders other than a normal cash dividend, or any similar transaction; provided, however, that conversion of any convertible securities of the company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Administrator and its determination shall be final, binding and conclusive.
Corporate Transaction. Effective upon the consummation of a Corporate Transaction, all outstanding awards under the A&R Plan will terminate unless the awards are assumed in connection with the Corporate Transaction. In addition, except as provided otherwise in an individual award agreement:
For the portion of each award that was granted in lieu of a cash payment for all or a portion of a participant’s annual bonus and that is assumed or replaced, then such award (or replacement award or program) shall become fully vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at fair market value) for all of the shares (or other consideration) at the time represented by the award upon the participant’s “separation from service” without “cause” or for “good reason” on or within eighteen (18) months after the Corporate Transaction.
For the portion of each award that was not granted in lieu of a cash payment for all or a portion of a participant’s annual bonus and that is assumed or replaced, then apro-rated amount of the unvested shares or other consideration subject to such award (or replacement award or program) shall become fully vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at fair market value) upon the participant’s “separation from service” without “cause” or for “good reason” on or within eighteen (18) months after the Corporate Transaction.
For the portion of each award that is neither assumed nor replaced, such portion of the award shall automatically become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at fair market value) for all of the shares (or other consideration) at the time represented by such portion of the award, immediately prior to the specified effective date of such Corporate Transaction, provided that the participant’s service has not terminated prior to such date.
Change in Control. Except as provided otherwise in an individual award agreement, in the event of a Change in Control, the portion of each award that was granted in lieu of a cash payment for all or a portion of a participant’s annual bonus shall become fully vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at fair market value) for all of the shares (or other consideration) at the time represented by the award upon the participant’s “separation from service” without “cause” or for “good reason” on or within eighteen (18) months after the Change in Control. For the portion of each award that was not granted in lieu of a cash payment for all or a portion of a participant’s annual bonus, then apro-rated amount of the unvested shares or other consideration subject to such award shall become fully vested, exercisable and payable and be released from any repurchase or
54 | Raymond James Financial, Inc. 2020 Proxy Statement
forfeiture rights (other than repurchase rights exercisable at fair market value) upon the participant’s “separation from service” without “cause” or for “good reason” on or within eighteen (18) months after the Change in Control.
Claw-back Provision for Executive Officers and Other Participants.The award agreements issued under the A&R Plan incorporate a policy that allows us to require forfeiture of the employee’s unvested incentive compensation awards if officers or certain other employees engage in defined activity detrimental to the company. For more information regarding our incentive compensation recoupment policy, see “COMPENSATION MATTERS—Compensation Discussion and Analysis-Compensation Recoupment Policy.”
Amendment, Suspension or Termination of the A&R Plan. The Board may at any time amend, suspend or terminate the A&R Plan. The A&R Plan will terminate on February 18, 2026, unless earlier terminated by the Board of Directors. To the extent necessary to comply with applicable provisions of federal securities laws, state corporate and securities laws, the Code, applicable rules of any stock exchange or national market system, and the rules of any foreign jurisdiction applicable to awards granted to residents of the jurisdiction, the Company shall obtain shareholder approval of any such amendment to the A&R Plan in such a manner and to such a degree as required.
Amended Plan Benefits
We have not granted awards subject to shareholder approval of the A&R Plan, as amended and restated. The amount and timing of awards under the A&R Plan, including grants to the executive officers named in the Summary Compensation Table below, are subject to the discretion of the Administrator, and, except as indicated below, the Administrator has not determined future awards or the participants who might receive them. Therefore, it is not presently possible to determine the benefits or amounts that may be received by individuals or groups pursuant to the A&R Plan in the future, other than ournon-executive directors, nor is it possible to determine the benefits or amounts which would have been received by or allocated to individuals or groups for 2019 if the A&R Plan had been in effect. Pursuant to our current compensation program fornon-executive directors, each of ournon-executive director receives an annual grant of restricted stock units, which units will vest in full on first anniversary of the grant (for more information regarding director compensation, see “Director Compensation”). Each grant consists of that number of restricted stock units settleable in shares of the company’s common stock equal to $150,000 divided by the fair market value of a share of common stock, measured on the basis of the closing sales price as reported on the NYSE on the date of determination. The estimated number of shares of common stock that will be underlying the annual grant to eachnon-executive director for 2020, based on the closing sales price of a share of common stock on December 16, 2019 as reported on the NYSE is 1,647 shares, subject to any future change in the fair market value of the company’s common stock.
Raymond James Financial, Inc. 2020 Proxy Statement | 55
The following table sets forth information with respect to the historical grant of RSUs and options under the 2012 Plan from the effective date of the 2012 Plan through December 16, 2019 (without regard to whether any grants were subsequently forfeited, terminated or canceled) to the executive officers named in the Summary Compensation Table below, to all current executive officers as a group, to all currentnon-employee directors as a group, to each nominee for election as a director, to all nominees for election as a director as a group (including our employee directors), to all associates of directors, executive officers or nominees, as a group, all other persons who received or are to receive 5% of any awards, as a group, and to all other employees and independent contractor registered representatives (including all current officers who are not executive officers) as a group. The level of past grants is not necessarily indicative of the level of future grants.
| | | | | | | | |
| Name and Position (1) | | Number of RSUs Granted | | | Number of Shares Underlying
Options Granted | |
Paul C. Reilly Chairman and Chief Executive Officer | | | 404,952 | | | | 62,500 | |
Jeffrey P. Julien Executive Vice President — Finance and Chief Financial Officer | | | 64,536 | | | | 62,500 | |
James E. Bunn President, Global Equities and Investment Banking — RJA | | | 130,354 | | | | 10,250 | |
Scott A. Curtis President — Private Client Group | | | 65,718 | | | | 32,500 | |
Bella Loykhter Allaire Executive Vice President — Technology and Operations — RJA | | | 75,783 | | | | 37,500 | |
All current executive officers, as a group (16 persons) | | | 1,364,735 | | | | 491,500 | |
All current directors who are not executive officers, as a group (10 persons) | | | 98,706 | | | | 0 | |
Nominees for election as a director(2): | | | | | | | | |
Charles G. von Arentschildt | | | 8,948 | | | | 0 | |
Robert M. Dutkowsky | | | 2,451 | | | | 0 | |
Jeffrey N. Edwards | | | 12,070 | | | | 0 | |
Benjamin C. Esty | | | 12,070 | | | | 0 | |
Anne Gates | | | 3,406 | | | | 0 | |
Francis S. Godbold(3) | | | 0 | | | | 0 | |
Thomas A. James(3) | | | 47,995 | | | | 0 | |
Gordon L. Johnson | | | 17,849 | | | | 0 | |
Roderick C. McGeary | | | 8,410 | | | | 0 | |
Raj Seshadri | | | 1,362 | | | | 0 | |
Susan N. Story | | | 16,070 | | | | 0 | |
Each associate of such directors, executive officers or nominees (1 person) | | | 2,683 | | | | 2,500 | |
Each other person who received or is to receive 5 percent of awards under the A&R Plan (0 persons) | | | 0 | | | | 0 | |
All employees and independent contractors, other than executive officers, as a group (3,023 persons) | | | 10,987,200 | | | | 3,672,823 | |
| (1) | Information presented is historical and does not reflect expected grants for 2020 with respect to any person. |
| (2) | Section excludes Mr. Reilly. Grant details disclosed in table above. |
| (3) | Messrs. Godbold and James do not receive compensation for their services as directors. |
56 | Raymond James Financial, Inc. 2020 Proxy Statement
For more information about awards previously granted to our directors, including material terms, under the 2012 Plan, see “Director Compensation.” For more information about awards previously granted to our named executive officers, including material terms, under the 2012 Plan, see “COMPENSATION MATTERS—Grants of Plan Based Awards for Fiscal 2019” and “COMPENSATION MATTERS—Outstanding Equity Awards at Fiscal Year End for 2019.”
As of December 16, 2019, the fair market value of a share of the company’s common stock was $91.05, measured on the basis of the closing sales price on that date as reported on the NYSE.
Federal Income Tax Consequences
The following is general summary as of this date of the federal income tax consequences to us and to U.S. participants for awards granted under the A&R Plan. The federal tax laws may change and the federal, state and local tax consequences for any participant will depend upon his or her individual circumstances. Tax consequences for any particular individual may be different. This summary does not purport to be complete, and does not discuss state, local ornon-U.S. tax consequences.
Non-qualified Stock Options. The grant of anon-qualified stock option under the A&R Plan will not result in any federal income tax consequences to the participant or to the company. Upon exercise of anon-qualified stock option, the participant is subject to income taxes at the rate applicable to ordinary compensation income on the difference between the option exercise price and the fair market value of the shares at the time of exercise. This income is subject to withholding for federal income and employment tax purposes. The company is entitled to an income tax deduction in the amount of the income recognized by the participant, subject to possible limitations imposed by Section 162(m) of the Code and so long as the company withholds the appropriate taxes with respect to such income (if required) and the participant’s total compensation is deemed reasonable in amount. Any gain or loss on the participant’s subsequent disposition of the shares of common stock will receive long or short-term capital gain or loss treatment, depending on whether the shares are held for more than one year following exercise. The company does not receive a tax deduction for any such gain.
Anon-qualified stock option can be considerednon-qualified deferred compensation and subject to Section 409A of the Code. A non-qualified stock option that does not meet the requirements of Code Section 409A can result in the acceleration of income recognition, an additional 20% tax obligation, plus penalties and interest.
Incentive Stock Options. The grant of an incentive stock option under the A&R Plan will not result in any federal income tax consequences to the participant or to the company. A participant recognizes no federal taxable income upon exercising an incentive stock option (subject to the alternative minimum tax rules discussed below), and the company receives no deduction at the time of exercise. In the event of a disposition of stock acquired upon exercise of an incentive stock option, the tax consequences depend upon how long the participant has held the shares of common stock. If the participant does not dispose of the shares within two years after the incentive stock option was granted, nor within one year after the incentive stock option was exercised, the participant will recognize a long-term capital gain (or loss) equal to the difference between the sale price of the shares and the exercise price. The company is not entitled to any deduction under these circumstances.
If the participant fails to satisfy either of the foregoing holding periods (referred to as a “disqualifying disposition”), he or she must recognize ordinary income in the year of the disposition. The amount of ordinary income generally is the lesser of (i) the difference between the amount realized on the disposition and the exercise price or (ii) the difference
Raymond James Financial, Inc. 2020 Proxy Statement | 57
between the fair market value of the stock at the time of exercise and the exercise price. Any gain in excess of the amount taxed as ordinary income will be treated as a long or short-term capital gain, depending on whether the stock was held for more than one year. The Company, in the year of the disqualifying disposition, is entitled to a deduction equal to the amount of ordinary income recognized by the participant, subject to possible limitations imposed by Section 162(m) of the Code and so long as the participant’s total compensation is deemed reasonable in amount.
The “spread” under an incentive stock option — i.e., the difference between the fair market value of the shares at exercise and the exercise price — is classified as an item of adjustment in the year of exercise for purposes of the alternative minimum tax. If a participant’s alternative minimum tax liability exceeds such participant’s regular income tax liability, the participant will owe the larger amount of taxes. In order to avoid the application of alternative minimum tax with respect to incentive stock options, the participant must sell the shares within the calendar year in which the incentive stock options are exercised. However, such a sale of shares within the year of exercise will constitute a disqualifying disposition, as described above.
Stock Appreciation Rights. Recipients of stock appreciation rights (“SARs”) generally should not recognize income until the SAR is exercised (assuming there is no ceiling on the value of the right). Upon exercise, the recipient will normally recognize taxable ordinary income for federal income tax purposes equal to the amount of cash and fair market value of the shares, if any, received upon such exercise. Recipients who are employees will be subject to withholding for federal income and employment tax purposes with respect to income recognized upon exercise of a SAR. Recipients will recognize gain upon the disposition of any shares received on exercise of a SAR equal to the excess of (i) the amount realized on such disposition over (ii) the ordinary income recognized with respect to such shares under the principles set forth above. That gain will be taxable as long or short-term capital gain depending on whether the shares were held for more than one year. The Company will be entitled to a tax deduction to the extent and in the year that ordinary income is recognized by the recipient, subject to possible limitations imposed by Section 162(m) of the Code and so long as the Company withholds the appropriate taxes with respect to such income (if required) and the recipient’s total compensation is deemed reasonable in amount.
A SAR also can be considerednon-qualified deferred compensation and subject to Section 409A of the Code. A SAR that does not meet the requirements of Code Section 409A can result in the acceleration of income recognition, an additional 20% tax obligation, plus penalties and interest.
Restricted Stock. A restricted stock award is subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code to the extent the award will be forfeited in the event that the participant ceases to provide services to the Company. As a result of this substantial risk of forfeiture, the recipient will not recognize ordinary income at the time of the award, unless the participant is retirement eligible. Instead, the recipient will recognize ordinary income on the date when the stock is no longer subject to a substantial risk of forfeiture, or when the stock becomes transferable, if earlier. The recipient’s ordinary income is measured as the difference between the amount paid for the stock, if any, and the fair market value of the stock on the earlier of those two dates.
The recipient may accelerate his or her recognition of ordinary income, if any, and begin his or her capital gains holding period by timely filing (i.e., within thirty (30) days of the award) an election pursuant to Section 83(b) of the Code. In such event, the ordinary income recognized, if any, is measured as the difference between the amount paid for the stock, if any, and the fair market value of the stock on the date of award, and the capital gain holding period commences on such date. The ordinary income recognized by a recipient that is an employee or former employee will be subject to tax withholding by the company.
58 | Raymond James Financial, Inc. 2020 Proxy Statement
Restricted Stock Units. With respect to awards of RSUs, no taxable income is reportable when the RSUs are granted to a participant or upon vesting of the RSUs. Upon settlement, the recipient will recognize ordinary income in an amount equal to the value of the payment received pursuant to the RSUs. The ordinary income recognized by a recipient that is an employee or former employee will be subject to tax withholding by the company.
Restricted stock units also can be considerednon-qualified deferred compensation and subject to Section 409A of the Code. A grant of restricted stock units that does not meet the requirements of Code Section 409A will result in an additional 20% tax obligation, plus penalties and interest to such recipient.
Dividends and Dividend Equivalents. Recipients of stock-based awards that earn dividends or dividend equivalents will recognize taxable ordinary income on any dividend payments received with respect to unvested and/or unexercised shares subject to such awards, which income is subject to withholding for federal income and employment tax purposes. The Company is entitled to an income tax deduction in the amount of the income recognized by a participant, subject to possible limitations imposed by Section 162(m) of the Code and so long as the Company withholds the appropriate taxes with respect to such income (if required) and the individual’s total compensation is deemed reasonable in amount.
Cash Awards. Upon receipt of cash, the participant will have taxable ordinary income, in the year of receipt, equal to the cash received. Any cash received will be subject to tax withholding by the Company. The Company is entitled to an income tax deduction in the amount of the income recognized by a participant, subject to possible limitations imposed by Section 162(m) of the Code and so long as the Company withholds the appropriate taxes with respect to such income (if required) and the individual’s total compensation is deemed reasonable in amount.
Tax Effect for the Company. Unless limited by Section 162(m) of the Code, the Company generally will be entitled to a tax deduction in connection with an award under the A&R Plan in an amount equal to the ordinary income realized by a recipient at the time the recipient recognizes such income (for example, when restricted stock is no longer subject to the risk of forfeiture).
The A&R Plan is not qualified under the provisions of section 401(a) of the Code and is not subject to any provisions of the Employee Retirement Income Security Act of 1974.
Raymond James Financial, Inc. 2020 Proxy Statement | 59
Audit Matters
Item 4.— Ratify Appointment of Independent Registered Public Accounting Firm
| | | | | | |
| | Proposal Snapshot — Item 3.Ratification of KPMG as our Independent Registered Public Accounting Firm for 2020 | | | | |
| | | | |
| | What is being voted on: Ratification of the appointment of KPMG as our independent registered public accounting firm. Board recommendation: Our Board unanimously recommends a vote FOR ratification of the appointment of KPMG as our independent registered public accounting firm for 2020. | | |
General
The ARC has appointed KPMG LLP as the independent registered public accounting firm to audit the company’s consolidated financial statements for the fiscal year ending September 30, 2020 and to audit the company’s internal control over financial reporting as of September 30, 2020. Representatives of KPMG LLP are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so. It is also expected that they will be available to respond to appropriate questions.
If the proposal to ratify the appointment is not approved, the ARC will reconsider the selection of KPMG LLP as the company’s independent registered public accounting firm, but may still determine that the appointment of our independent registered public accounting firm is in the best interests of the company and its shareholders. Even if the appointment is ratified by the shareholders, the ARC, in its discretion, may appoint a different independent registered public accounting firm at any time during the year if the ARC determines that such a change would be in the best interests of the company and its shareholders.
Fees Paid to Independent Registered Public Accounting Firm
The ARC, with the approval of the shareholders, engaged KPMG to perform an annual audit of the company’s consolidated financial statements for fiscal year 2019. The following table sets forth the approximate aggregate fees billed or expected to be billed to the company by KPMG for fiscal years 2019 and 2018 for the audit of the company’s annual consolidated financial statements and for other services rendered by KPMG.
| | | | | | | | |
| | | Fiscal Year | |
| | | 2019 | | | 2018 | |
Audit(1) | | $ | 6,729,507 | | | $ | 6,542,265 | |
Audit-Related(2) | | | 445,265 | | | | 559,821 | |
Tax(3) | | | 395,904 | | | | 380,413 | |
All Other Fees(4) | | | 30,500 | | | | 126,759 | |
| | | | | | | | | |
TOTAL | | $ | 7,601,176 | | | $ | 7,609,258 | |
| (1) | Audit Fees represents fees for the audit of the company’s consolidated and subsidiary financial statements. |
| (2) | Audit-Related Fees consist primarily of fees for custody rule examinations of registered investment advisors, including the issuance of an independent auditors report on controls over custody operations, an examination to report on controls applicable to our“e-folio” fixed income client application, FICCA attestations for our mutual fund customers and HUD attestations for RJ Bank. |
| (3) | Tax Fees includes tax compliance and consulting services related to federal and state tax returns. |
| (4) | All Other Fees consist principally of technical services provided during the implementation of certain accounting standards. |
60 | Raymond James Financial, Inc. 2020 Proxy Statement
The ARC has adopted a policy forpre-approving all audit andnon-audit services provided by our independent auditors. The policy is designed to ensure that the auditor’s independence is not impaired. The policy provides that, before the company engages the independent auditor to render any service, the engagement must be specifically approved by the ARC. All audit andnon-audit services provided to the company and its subsidiaries by KPMG during fiscal year 2019 were specifically approved.
Report of the Audit and Risk Committee
Members of the ARC have reviewed and discussed with management and with representatives of KPMG LLP the consolidated financial statements for fiscal 2019 contained in our Annual Report on Form10-K and the integrated audit of the consolidated financial statements and internal control over financial reporting for fiscal 2019. In addition, the ARC has discussed with KPMG LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The ARC also received the written disclosures and the letter from KPMG LLP required by the applicable requirements of the PCAOB regarding independent auditor communications with the ARC concerning independence, and discussed with KPMG LLP their independence from us and our management, and considered their independence in connection with anynon-audit services provided. The ARC also reviewed with KPMG LLP our critical accounting policies and practices and certain written communications between KPMG LLP and our management.
Based on the reviews and discussions referred to above, and in reliance on the representations of management and the independent registered public accounting firm’s report with respect to the financial statements, the ARC recommended to the Board that the audited financial statements be included in our Annual Report on Form10-K for fiscal 2019 for filing with the SEC. The Board approved the recommendation.
Management is responsible for our financial statements and the financial reporting process, including our system of internal controls. Our independent registered public accounting firm is responsible for the integrated audit of the consolidated financial statements and internal control over financial reporting in accordance with the standards of the PCAOB. The firm issues reports on our consolidated financial statements and the effectiveness of internal control over financial reporting.
The ARC members are not professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm. The ARC serves a board-level oversight role, in which it provides advice, counsel and direction to management and the independent registered public accounting firm on the basis of the information it receives, discussions with management and the independent registered public accounting firm, and the experience of the ARC’s members in business, financial and accounting matters. In its oversight role, the ARC relies on the work and assurances of our management, which has the primary responsibility for financial statements and reports, and of the independent registered public accounting firm, who, in their report, express an opinion on the conformity of our annual financial statements with U.S. generally accepted accounting principles.
Benjamin C. Esty, Chairman
Charles G. von Arentschildt
Shelley G. Broader
Robert M. Dutkowsky
Anne Gates
Roderick C. McGeary
Raj Seshadri*
* Joined the ARC as of June 1, 2019
Raymond James Financial, Inc. 2020 Proxy Statement | 61
Security Ownership Information
Security Ownership of Principal Shareholders
The following table sets forth the shares beneficially owned as of December 10, 2019 by each shareholder known to us to beneficially own more than five percent (5%) of the company’s outstanding shares. The percentage of ownership indicated in the following table is based on 139,206,446 shares outstanding as of December 10, 2019.
| | | | | | | | |
| Name and Address of Beneficial Owner | | Amount and
Nature of
Beneficial
Ownership(1) | | | Percent of
Class | |
Thomas A. James, Chairman Emeritus, Director, 880 Carillon Parkway, St. Petersburg, FL 33716 | | | 13,915,011 | (2) | | | 10.00 | % |
The Vanguard Group, Inc., 100 Vanguard Boulevard, Malvern, PA 19355 | | | 13,968,613 | (3) | | | 10.03 | % |
BlackRock, Inc., 55 East 52nd Street, New York, NY 10055 | | | 8,648,787 | (4) | | | 6.21 | % |
| (1) | Except as described otherwise in the footnotes to this table, each beneficial owner in the table has sole voting and investment power with regard to the shares beneficially owned by such owner. |
| (2) | As of December 10, 2019, Mr. James had sole voting power with respect to 13,797,924 shares, shared voting power with respect to 117,087 shares, sole dispositive power with respect to 13,797,924 shares, and shared dispositive power with respect to 117,087 shares, of our common stock. Includes 3,103 shares subject to RSUs that will vest within 60 days. |
| (3) | On September 10, 2019, The Vanguard Group, Inc., on behalf of itself and certain of its affiliates (collectively, “Vanguard”), filed a Schedule 13G/A with the SEC indicating that Vanguard had sole voting power with respect to 147,959 shares, shared voting power with respect to 34,117 shares, sole dispositive power with respect to 13,790,493 shares, and shared dispositive power with respect to 178,120 shares, of our common stock. |
| (4) | On February 6, 2019, BlackRock, Inc., on behalf of itself and certain of its affiliates (collectively, “BlackRock”), filed a Schedule 13G/A with the SEC indicating that BlackRock had sole voting power with respect to only 7,588,849 shares of our common stock. |
Stock Ownership Policy
The company maintains a Directors and Executive Officers Stock Ownership Policy that imposes the following requirements on our CEO and other executive officers with respect to holding shares of our common stock.
| | | | | | |
| Title | | Holding requirement | | Valuation | | What counts? |
Non-executive director | | 5X annual retainer | | Average of NYSE closing price during 60 days prior to measurement | | • Shares owned directly or jointly with family members • Shares owned indirectly • Unvested time-based restricted stock and RSUs |
Chief Executive Officer | | 7X annual salary |
Executive Officers | | 3X annual salary |
(Please see above under “Director Compensation—Stock Ownership Policy for Directors and Executive Officers” for further information.)
62 | Raymond James Financial, Inc. 2020 Proxy Statement
Security Ownership of Management
The following table lists the shares of common stock beneficially owned as of December 10, 2019 by (1) each director and director nominee, (2) each executive officer named in the Summary Compensation Table below, and (3) all current directors, director nominees and executive officers as a group. The percentage of ownership indicated in the following table is based on 139,206,446 of the company’s shares outstanding on December 10, 2019.
Beneficial ownership has been determined according to SEC regulations and includes shares that may be acquired within 60 days after December 10, 2019, upon the exercise of outstanding stock options and the vesting of RSUs. Unless otherwise indicated, all directors, director nominees and executive officers have sole voting and investment power with respect to the shares shown. No shares are pledged as security. As of December 10, 2019, no individual director, director nominee or named executive officer other than Thomas A. James, our Chairman Emeritus, owned beneficially 1% or more of our shares, and our directors, director nominees and executive officers as a group owned approximately 10.82% of our outstanding shares.
| | | | | | | | | | | | | | | | | | | | |
| | | Common Stock Beneficially Owned | |
| Name | | Shares of
Common
Stock | | | Number of
Shares
Subject to
Exercisable
Stock Options | | | Number of
Shares
Subject to
Vesting of
Restricted
Stock Units | | | Total Number
of Beneficially
Owned Shares | | | Percent of
Class | |
Thomas A. James | | | 13,911,908 | (1)(2) | | | — | | | | 3,103 | | | | 13,915,011 | | | | 10.00 | % |
Charles G. von Arentschildt | | | 7,159 | | | | — | | | | — | | | | 7,159 | | | | * | |
Shelley G. Broader | | | 22,281 | | | | — | | | | — | | | | 22,281 | | | | * | |
James E. Bunn | | | 12,926 | (2) | | | 2,800 | | | | 4,597 | | | | 20,323 | | | | * | |
Scott A. Curtis | | | 83,838 | (2) | | | 19,997 | | | | 1,793 | | | | 105,628 | | | | * | |
Robert M. Dutkowsky | | | 662 | | | | — | | | | — | | | | 662 | | | | * | |
Jeffrey N. Edwards | | | 12,281 | | | | — | | | | — | | | | 12,281 | | | | * | |
Benjamin C. Esty | | | 11,581 | | | | — | | | | — | | | | 11,581 | | | | * | |
Anne Gates | | | 1,617 | | | | — | | | | — | | | | 1,617 | | | | * | |
Francis S. Godbold | | | 136,218 | (2) | | | — | | | | — | | | | 136,218 | | | | * | |
Gordon L. Johnson | | | 18,328 | | | | — | | | | — | | | | 18,328 | | | | * | |
Jeffrey P. Julien | | | 53,694 | (2)(3) | | | 2,500 | | | | 2,155 | | | | 58,349 | | | | * | |
Bella Loykhter Allaire | | | 66,774 | (2) | | | 4,574 | | | | 2,069 | | | | 73,417 | | | | * | |
Roderick C. McGeary | | | 6,621 | | | | — | | | | — | | | | 6,621 | | | | * | |
Paul C. Reilly | | | 111,862 | (2) | | | 2,500 | | | | 18,446 | | | | 132,808 | | | | * | |
Raj Seshadri | | | — | | | | — | | | | — | | | | — | | | | * | |
Susan N. Story | | | 25,138 | | | | — | | | | — | | | | 25,138 | | | | * | |
All Directors and Executive Officers as a Group (27 persons) | | | 14,923,955 | (2) | | | 110,107 | | | | 44,824 | | | | 15,078,886 | | | | 10.82 | % |
| (1) | Includes 662,754 shares held by the Robert A. James Irrevocable Trust, for which Thomas A. James serves as trustee, and which has as beneficiaries other James family members. Thomas A. James disclaims any beneficial ownership interest in this trust. Includes 117,087 shares for which Mr. James has shared voting power and shared dispositive power. |
| (2) | Includes shares credited to Employee Stock Ownership Plan accounts. |
| (3) | Includes 6,060 shares held by Mr. Julien’s spouse. |
Raymond James Financial, Inc. 2020 Proxy Statement | 63
Delinquent Section 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
ReportsSection 16(a) of the Exchange Act requires officers, directors and persons who beneficially own more than 10% of the company’s shares to file reports of ownership on Form 3 and reports of changes in ownership on Forms 4 or 5 with the SEC. The reporting officers, directors and 10% shareholders are also required by SEC rules to furnish the company with copies of all Section 16(a) reports they file.
Based solely on its review of copies of such reports, the company believes that all Section 16(a) filing requirements applicable to its directors, executive officers and 10% shareholders were complied with during fiscal year 2017.
PROPOSAL NO. 2
ADVISORY VOTE ON EXECUTIVE COMPENSATION
General
Section 14A of the Securities Exchange Act of 1934 enables our shareholders2019, except that, due to votea clerical error, Mr. Santelli inadvertently filed one Form 4 report with respect to approve, on an advisory (nonbinding) basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. We are asking our shareholders to indicate their support for our named executive officer compensation as described in this proxy statement. This proposal, commonly known as a ‘‘say-on-pay’’ proposal, gives our shareholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement.
As discussed in the Compensation Discussion and Analysis section of this proxy statement, we seek to establish and maintain compensation policies that will enable us to attract, motivate and retain high-quality executive officers and ensure that their individual interests are aligned with those of our shareholders. Our goal is to utilize our compensation programs to reward executive officers for the achievement of short-term and long-term strategic and operational goals and increased total shareholder return, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking. Our executive officers’ total compensation is comprised of a mix of base salary, annual incentive bonus (which includes both cash and time- and performance-basedholiday weekend vesting restricted stock unit awards), grants of retention restricted stock units, and retirement plan contributions. The Corporate Governance, Nominating and Compensation Committee (the “Committee”) does not utilize formulaic financial performance goals or targets in awarding compensation. Rather, the Committee reviews company and individual performance each year, and then applies its broad discretion in determining the appropriate amounts of compensation for the fiscal year, based on a variety of factors, both objective and subjective.
Summary of Compensation Decisions for 2017
After assessing the company’s financial and strategic performance for fiscal 2017, and after further evaluating the individual performance of our named executive officers, the Committee exercised its discretion to award total annual direct compensation for 2017 to our NEOs as set forth in the following table. For purposes of this table, ‘‘total annual direct compensation’’ means the sum of (i) salary for the fiscal year indicated, (ii) the annual bonus (both cash and equity components) and (iii) retention RSUs earned during such fiscal year but awarded in the subsequent fiscal year.
|
| | | |
| Total Annual Direct Compensation |
| Named Executive Officer | Fiscal 2017 | Fiscal 2016 | Percentage
Increase/(Decrease) |
| Paul C. Reilly | $11,090,000 | $8,414,400 | 31.80% |
| Jeffrey P. Julien | $3,121,500 | $2,689,700 | 16.05% |
| John C. Carson, Jr. | $3,391,500 | $3,559,700 | (4.73)% |
| Jeffrey E. Trocin | $4,246,500 | $2,564,661 | 65.58% |
| Dennis W. Zank | $4,021,500 | $3,689,700 | 8.99% |
This table depicts how the Committee viewed its compensation decisions for our NEOs, but the presentation herein differs substantially from the Summary Compensation Table (‘‘SCT’’) on page 39 that is required by SEC rules. This table is not a substitute for the information presented in the SCT. Among other differences, the table above includes equity awards in the column for the year they were earned, rather than the year in which the grant date occurred. Please see the note on page 32 for further important information on the differences between this presentation and the SCT.
Accordingly, we will ask our shareholders to vote ‘‘FOR’’ the following resolution at the Annual Meeting:
one day late.‘‘64RESOLVED, that the Company’s shareholders approve, on an advisory (non-binding) basis, the compensation of the named executive officers, as disclosed in the Company’s | Raymond James Financial, Inc. 2020 Proxy Statement for the 2018 Annual Meeting
of Shareholders pursuant to the Securities and Exchange Commission’s compensation disclosure rules, including the Compensation Discussion and Analysis, the compensation tables and related narrative discussion.’’
The say-on-pay vote is advisory, and therefore not binding on the Company, the CGN&C Committee or our Board of Directors. Our Board of Directors and our CGN&C Committee value the opinions of our shareholders and to the extent there is any significant vote against the named executive officer compensation as disclosed in this proxy statement, we will consider our shareholders’ concerns and the CGN&C Committee will evaluate whether any actions are necessary to address those concerns. Under the Board’s current policy, shareholders are given an opportunity to cast an advisory vote on this topic annually, with the next opportunity occurring in connection with the company’s annual meeting of shareholders in 2019.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE ‘‘FOR’’ THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SECURITIES AND EXCHANGE COMMISSION. The voting requirements for this proposal are described in the ‘‘Questions and Answers About Voting Your Shares’’ section above.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
GENERAL
The Audit and Risk Committee of the Board has appointed KPMG LLP as the independent registered public accounting firm to audit the company’s consolidated financial statements for the fiscal year ending September 30, 2018 and to audit the company’s internal control over financial reporting as of September 30, 2018.
Representatives of KPMG LLP are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so. It is also expected that they will be available to respond to appropriate questions.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE ‘‘FOR’’ RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2018. The voting requirements for this proposal are described in the ‘‘Questions and Answers About Voting Your Shares’’ section of | | |
| Why did I receive this Proxy Statement? | | You have received these proxy materials because Raymond James’s Board of Directors is soliciting your proxy to vote your shares at the Annual Meeting on February 20, 2020. This proxy statement includes information that is designed to assist you in voting your shares and information that we are required to provide to you under the rules of the Securities and Exchange Commission (“SEC”). On January 10, 2020, we mailed this proxy statement to shareholders of record as of the close of business on December 23, 2019 (“Record Date”). |
| What is a proxy? | | A “proxy” is a written authorization from you to another person that allows such person (the “proxy holder”) to vote your shares on your behalf. The Board of Directors is asking you to allow any of the following persons to vote your shares at the Annual Meeting: Paul C. Reilly, Chairman and Chief Executive Officer, and Thomas A. James, Chairman Emeritus. |
| Who is entitled to vote? | | Each Raymond James shareholder of record on the Record Date for the Annual Meeting is entitled to attend and vote at the Annual Meeting. |
| What is the difference between holding shares as a shareholder “of record” and as a “beneficial owner”? | | • Shareholders of Record.You are a shareholder of record if at the close of business on the Record Date your shares were registered directly in your name with Computershare, our transfer agent. • Beneficial Owner.You are a beneficial owner if at the close of business on the Record Date your shares were held by a brokerage firm or other nominee and not in your name. Being a beneficial owner means that, like most of our shareholders, your shares are held in “street name.” As the beneficial owner, you have the right to direct your broker or nominee how to vote your shares by following the voting instructions your broker or other nominee provides. If you do not provide your broker or nominee with instructions on how to vote your shares, your broker or nominee will be able to vote your shares with respect to some of the proposals, but not all. Please see“What if I return a signed proxy or voting instruction card, but do not specify how my shares are to be voted ?” for additional information. • Raymond James has requested banks, brokerage firms and other nominees who hold Raymond James shares on behalf of beneficial owners of the shares as of the close of business on the Record Date to forward proxy materials to those beneficial owners. Raymond James has agreed to pay the reasonable expenses of the banks, brokerage firms and other nominees for forwarding these materials. |
| How many votes do I have? | | Every holder of a share of common stock on the Record Date will be entitled to one vote per share for each Director to be elected at the Annual Meeting and to one vote per share on each other matter presented at the Annual Meeting. On the Record Date there were 139,178,823 shares outstanding and entitled to vote at the Annual Meeting. |
Raymond James Financial, Inc. 2020 Proxy Statement. If the proposal to ratify the appointment is not approved, the Audit and Risk Committee will reconsider the selection of KPMG LLP as the company’s independent registered public accounting firmStatement | 65
| | |
| What proposals are being presented at the Annual Meeting? | | Raymond James intends to present proposals numbered one through four for shareholder consideration and voting at the Annual Meeting. These proposals are for: 1. Election of twelve (12) director nominees named in the Proxy Statement; 2. Advisory vote to approve executive compensation (“say-on-pay”); 3. Approval of the Amended and Restated 2012 Stock Incentive Plan; and 4. Ratification of the appointment of KPMG LLP as the company’s independent registered public accounting firm. Other than the matters set forth in this Proxy Statement and matters incident to the conduct of the Annual Meeting, Raymond James does not know of any business or proposals to be considered at the Annual Meeting. If any other business is proposed and properly presented at the Annual Meeting, the proxies received from our shareholders give the proxy holders the authority to vote on such matter in their discretion. |
| How does the Board of Directors recommend that I vote? | | The Board of Directors recommends that you vote: • FOR the election of the twelve (12) directors nominated by our Board and named in this proxy statement; • FOR the approval, on an advisory basis, of the compensation of our named executive officers (“say-on-pay”); • FOR the approval of the Amended and Restated 2012 Stock Incentive Plan; and • FOR ratification of the appointment of KPMG LLP as the company’s independent registered public accounting firm. |
| How do I attend the Annual Meeting? | | All shareholders are invited to attend the Annual Meeting. If your Raymond James shares are held in a bank or brokerage account, you should promptly contact your bank or broker to obtain a written legal proxy in time to vote your shares at the meeting. Obtaining this proxy may take substantial time. If you do not obtain a legal proxy from your bank or broker, you will not be entitled to vote your shares, but you can still attend the Annual Meeting. |
| How do I vote and what are the voting deadlines? | | You may vote your shares in person at the Annual Meeting or by proxy. There are three ways to vote by proxy: • By Mail: If you have received your proxy materials by mail, you can vote by marking, dating and signing your proxy card and returning it by mail in the enclosed postage-paid envelope. If you hold your shares in an account with a bank or broker (i.e., in “street name”), you can vote by following the instructions on the voting instruction card provided to you by your bank or broker. Proxy cards returned by mail must be received no later than the close of business on February 19, 2020. • Via the Internet:You can submit a proxy via the Internet until 1:00 a.m. Central Time on February 20, 2020, by accessing the website at http://www.investorvote.com/RJFand following the instructions you will find on the website. Internet proxy submission is available 24 hours a day. You will be given the opportunity to confirm that your instructions have been properly recorded. |
,66 but still may determine that the appointment of our independent registered public accounting firm is in the best interests of the company and its shareholders. Even if the appointment is ratified by the shareholders, the Audit and Risk Committee, in its discretion, may appoint a different independent registered public accounting firm at any time during the year if the Audit and Risk Committee determines that such a change would be in the best interests of the company and its shareholders.| Raymond James Financial, Inc. 2020 Proxy Statement
| | |
| | • By Telephone:You can submit a proxy by telephone until 1:00 a.m. Central Time on February 20, 2020, by calling toll-free1-800-652-VOTE (8683) (from the U.S. and Canada) and following the instructions. Even if you plan to be present at the Annual Meeting, we encourage you to vote your shares by proxy using one of the methods described above. Raymond James shareholders of record who attend the meeting may vote their shares in person, even though they have sent in proxies. |
| What if my shares are held in the Raymond James ESOP? | | For participants in the Raymond James Employee Stock Ownership Plan (the “ESOP”), your shares will be voted as you instruct the trustee of the ESOP. There are three ways to vote: by returning your proxy card, via the Internet or by telephone. Please follow the instructions included on your proxy card on how to vote using one of the three methods. Your vote will serve as voting instructions to the trustee of the ESOP for shares allocated to your account. If you do not vote shares allocated to your account held in the ESOP, your shares will nevertheless be voted by the trustee in the same proportion as it votes the shares of ESOP participants who have instructed the trustee on how to vote. You cannot vote your ESOP shares in person at the meeting.To allow sufficient time for voting by the trustee of the ESOP, our transfer agent must receive your vote by no later than 5:00 p.m. Eastern Time on February 17, 2020. |
| May I change or revoke my vote? | | Yes. You may change your vote in one of several ways at any time before it is exercised: • Grant a subsequent proxy via the Internet or telephone; • Submit another proxy card (or voting instruction card) with a date later than your previously delivered proxy; • Notify our Secretary in writing before the Annual Meeting that you are revoking your proxy or, if you hold your shares in “street name,” follow the instructions on the voting instruction card; or • If you are a shareholder of record, or a beneficial owner with a proxy from the shareholder of record, vote in person at the Annual Meeting. |
| What will happen if I do not vote my shares? | | • Shareholders of Record.If you are the shareholder of record of your shares and you do not vote in person at the Annual Meeting, or by proxy by mail, via the Internet or by telephone, your shares will not be voted at the Annual Meeting. • Beneficial Owners. If you are the beneficial owner of your shares, your broker or nominee may vote your shares only on those proposals on which it has discretion to vote. Under the rules of the NYSE, your broker or nominee has discretion to vote your shares on routine matters, such as Proposal 4, but does not have discretion to vote your shares onnon-routine matters, such as Proposals 1, 2 and 3. Therefore, if you do not instruct your broker as to how to vote your shares on Proposals 1, 2 or 3, this would be a “brokernon-vote,” and your shares would not be counted as having been voted on the applicable proposal.We therefore strongly encourage you to instruct your broker or nominee on how you wish to vote your shares. |
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| What is the effect of a brokernon-vote or abstention? | | Under NYSE rules, brokers or other nominees who hold shares for a beneficial owner have the discretion to vote on a limited number of “routine” proposals when they have not received voting instructions from the beneficial owner at least ten days prior to the Annual Meeting. A “brokernon-vote” occurs when a broker or other nominee does not receive such voting instructions and does not have the discretion to vote the shares. Pursuant to ourBy-laws, brokernon-votes and abstentions are not counted as “votes cast” on such matter, but are counted for quorum purposes. With respect to Proposal 3 only (the approval of our Amended and Restated Stock Incentive Plan), however, NYSE rules require that we treat abstentions as “votes cast” on such matter. This means that, for the proposal to be approved, the number of votes “for” the proposal must exceed the sum of the votes “against” and “abstain.” |
| What if I return a signed proxy or voting instruction card, but do not specify how my shares are to be voted? | | • Shareholders of Record. If you are a shareholder of record and you submit a signed proxy, but you do not provide voting instructions, all of your shares will be voted FOR Proposals 1, 2, 3 and 4. |
| • Beneficial Owners. If you are a beneficial owner and you do not provide the broker or other nominee that holds your shares with voting instructions, the broker or other nominee will determine if it has the discretionary authority to vote on the particular matter. Under NYSE rules, brokers and other nominees have the discretion to vote on routine matters, such as Proposal 4, but do not have discretion to vote onnon-routine matters, such as Proposals 1, 2 and 3. Therefore, if you do not provide voting instructions to your broker or other nominee, your broker or other nominee may only vote your shares on Proposal 4 and any other routine matters properly presented for a vote at the Annual Meeting. |
| What does it mean if I receive more than one set of Proxy Materials? | | It means you own Raymond James shares in more than one account, such as individually and jointly with your spouse. Please vote all of your shares. Beneficial owners sharing an address who are receiving multiple copies of the proxy materials may contact their broker, bank or other nominee to request that only a single copy of such document(s) be mailed to all shareholders at the shared address in the future. In addition, if you are the beneficial owner, your broker, bank or other nominee may deliver only one copy of the proxy materials to multiple shareholders who share an address unless that broker, bank or other nominee has received contrary instructions from one or more of the beneficial owners. Raymond James will deliver promptly, upon request, a separate copy of the proxy materials to a shareholder at a shared address to which a single copy of such document(s) was delivered. Shareholders who wish to receive a separate written copy of such documents, now or in the future, should submit their request to our Secretary by writing Raymond James Financial, Inc., Attn: Secretary, 880 Carillon Parkway, St. Petersburg, Florida 33716. |
| What is a quorum? | | A quorum is necessary to hold a valid meeting. The presence, in person or by proxy, of shareholders representing a majority of the outstanding capital stock of the company entitled to vote at the meeting constitutes a quorum for the conduct of business. |
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| What vote is required in order to approve each proposal? | | For each proposal, the affirmative vote of a majority of the “votes cast” on such proposal at the Annual Meeting is required. For Proposals 1, 2 and 4, our By-laws provide that a majority of the votes cast means that the number of shares voted “for” a proposal must exceed the number of shares voted “against” such proposal. Abstentions and brokernon-votes, if any, are not counted as “votes cast” with respect to such proposal. (In the case of any contested director election, directors are elected by a plurality of the “votes cast”) For Proposal 3, however, NYSE rules require that abstentions be treated as “votes cast.” As a result, for the approval of Proposal 3, the number of shares voted “for” the proposal must exceed the sum of the number of shares votes “against” and the number of shares voted “abstain” on such proposal. |
| How will voting on any other business be conducted? | | Other than the matters set forth in this Proxy Statement and matters incident to the conduct of the Annual Meeting, we do not know of any business or proposals to be considered at the Annual Meeting. If any other business is proposed and properly presented at the Annual Meeting, the persons named as proxies will vote on the matter in their discretion. |
| What happens if the Annual Meeting is adjourned or postponed? | | Your proxy will still be effective and will be voted at the rescheduled Annual Meeting. You will still be able to change or revoke your proxy until it is voted. |
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| Who will count the votes? | | Our General Counsel and Secretary will act as the inspector of election and will tabulate the votes. |
| How can I find the results of the Annual Meeting? | | Preliminary results will be announced at the Annual Meeting. Final results will be published in a Current Report on Form8-K that we will file with the SEC within four (4) business days after the Annual Meeting. |
| Who is paying for the costs of this proxy solicitation? | | We will bear the expense of soliciting proxies. We have retained MacKenzie Partners, Inc. to solicit proxies for a fee of approximately $15,500 plus a reasonable amount to cover expenses. Proxies may also be solicited in person, by telephone or electronically by Raymond James personnel who will not receive additional compensation for such solicitation. Copies of proxy materials and our Annual Report will be supplied to brokers and other nominees for the purpose of soliciting proxies from beneficial owners, and we will reimburse such brokers or other nominees for their reasonable expenses. |
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ADDITIONAL INFORMATION
Additional InformationCosts of Solicitation
The cost of solicitation of proxies will be paid by Raymond James. We have retained MacKenzie Partners, Inc. to solicit proxies for a fee of approximately $15,000$15,500 plus a reasonable amount to cover expenses. Proxies may also be solicited in person, by telephone or electronically by Raymond James personnel who will not receive additional compensation for such solicitation. Copies of proxy materials and our Annual Report on Form10-K will be supplied to brokers and other nominees for the purpose of soliciting proxies from beneficial owners, and we will reimburse such brokers or other nominees for their reasonable expenses.
Principal Executive Offices
The principal executive offices of Raymond James are located at 880 Carillon Parkway, St. Petersburg, Florida 33716, and the telephone number there is727-567-1000.
Shareholder Proposals for the 20192020 Annual Meeting
In accordance with the rules established by the SEC, any shareholder proposal submitted pursuant to Rule14a-8 under the Exchange Act intended for inclusion in the proxy statement for next year’s annual meeting of shareholders must be received by the company no later than 120 days before the anniversary of the date of this proxy statement (
e.g., not later than September 10, 2018)11, 2020). Such proposals should be sent in writing to Raymond James Financial, Inc., Attn: Secretary, 880 Carillon Parkway, St. Petersburg, Florida 33716. To be included in the Proxy Statement, the proposal must comply with the requirements as to form and substance established by the SEC and ourBy-laws, and must be a proper subject for shareholder action under Florida law.A shareholder may otherwise propose business for consideration or nominate persons for election to the Board in compliance with SEC proxy rules, Florida law, ourBy-laws and other legal requirements, without seeking to have the proposal included in Raymond James’s proxy statement pursuant to Rule14a-8 under the Exchange Act. Under ourBy-laws, notice of such a proposal must generally be provided to our Secretary not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting. The period under ourBy-laws for receipt of such proposals for next year’s meeting is thus from October 25, 201823, 2020 to November 24, 2018.23, 2020. (However, if the date of the Annualannual meeting is more than 30 days before or more than 60 days after such anniversary date, any notice by a shareholder of business or the nomination of directors for election or reelection to be brought before the annual meeting to be timely must be so delivered (i) not earlier than the close of business on the 120
th 120th day prior to such annual meeting and (ii) not later than the close of business on the later of (A) the 90th 90th day prior to such annual meeting and (B) the 10th 10th day following the day on which public announcement of the date of such meeting is first made.)Under Rule14a-4 under the Exchange Act, proxies may be voted on matters properly brought before a meeting under these procedures in the discretion of the proxy holders, without additional proxy statement disclosure about the matter, unless Raymond James is notified about the matter not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting and the proponents otherwise satisfy the requirements of Rule14a-4. The period under ourBy-laws for receipt of such proposals for next year’s meeting is from October 25, 201823, 2020 to November 24, 2018.23, 2020.
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United States Securities and Exchange Commission Reports
A copy of the company’s Annual Report on Form10-K, including financial statements, for the fiscal year ended September 30, 20172019 (the ‘‘Annual Report’’“Annual Report”), is being furnished concurrently herewith to all shareholders holding shares as of the Record Date. Please read it carefully.
Shareholders may also obtain additional copies of the Annual Report, without charge, by visiting the company’s Web sitewebsite at
www.raymondjames.comor by submitting a request to our Secretary by writing Raymond James Financial, Inc., Attn: Secretary, 880 Carillon Parkway, St. Petersburg, Florida 33716. Upon request to our Secretary, the exhibits set
forth on the exhibit index of the Annual Report may be made available at a reasonable charge (which will be limited to our reasonable expenses in furnishing such exhibits).
Communications with the Lead Director andNon-Executive Directors
Any interested party may communicate with the Lead Director of our Board, Ms. Susan N. Story, or with ournon-executive directors as a group, by writing to the following address:
Raymond James Financial, Inc.
St. Petersburg, Florida 33716
Communications will be reviewed by our corporate secretary and distributed to the Lead Director, the Board, or to any of the Board’s committees or individual directors as appropriate, depending on the facts and circumstances of the communication. In that regard, the Raymond James Board does not receive certain items which are unrelated to the duties and responsibilities of the Board.
In addition, the company maintains a Confidential Reporting Hotline (888-686-8351) for its employees or individuals outside the company to report complaints or concerns on an anonymous and confidential basis regarding questionable accounting, internal accounting controls or auditing matters and possible violations of the company’s Code of Conduct or law. Further information about the Raymond James Confidential Reporting Hotline is available on the company’s Web site.
website.Non-employees may submit any complaint regarding accounting, internal accounting controls or auditing matters directly to the Audit and Risk Committee of the Board of Directors by sending a written communication to the address given below:
Raymond James Financial, Inc.
St. Petersburg, Florida 33716
Householding of Proxy Materials
The SEC has adopted rules that permit companies and intermediaries (such as banks and brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more shareholders sharing the same address by delivering a single proxy statement and annual report addressed to those shareholders. This process,
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which is commonly referred to as ‘‘householding,’’“householding,” potentially means extra convenience for shareholders and cost savings for companies.
A number of banks and brokers with account holders who are beneficial holders of the company’s shares will be householding the company’s proxy materials. Accordingly, a single copy of the proxy materials will be delivered to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once you have received notice from your bank or broker that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive separate proxy materials, please notify your bank or broker, or contact our Secretary at727-567-5185 or by mail to Raymond James Financial, Inc., Attn: Secretary, 880 Carillon Parkway, St. Petersburg, Florida 33716. The company undertakes, upon oral or written request to the address or telephone number above, to deliver promptly a separate copy of the company’s proxy materials to a shareholder at a shared address to which a single copy of the applicable document was delivered. Shareholders who currently receive multiple copies of the proxy materials at their address and would like to request householding of their communications should contact their bank or broker or the company’s Investor Relations Department at the contact address and telephone number provided above.
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APPENDIX A
RAYMOND JAMES FINANCIAL, INC.
AMENDED AND RESTATED 2012 STOCK INCENTIVE PLAN
(as amended through February 20, 2020)
1. Purposes of the Plan. The purposes of this Plan are to attract and retain the best available personnel, to provide additional incentives to Employees, Directors and Independent Contractors and to promote the success of the Company’s business.
2. Definitions. The following definitions shall apply as used herein and in the individual Award Agreements except as defined otherwise in an individual Award Agreement. In the event a term is separately defined in an individual Award Agreement, such definition shall supersede the definition contained in this Section 2.
(a) “Administrator” means the Board or the Committee.
(b) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule12b-2 promulgated under the Exchange Act.
(c) “Applicable Laws” means the legal requirements relating to the Plan and the Awards under applicable provisions of federal securities laws, state corporate and securities laws, the Code, the legal requirements of any applicable stock exchange or national market system, and the legal requirements of anynon-U.S. jurisdiction applicable to Awards granted to residents therein.
(d) “Assumed” means that pursuant to a Corporate Transaction either (i) the Award is expressly affirmed by the Company or (ii) the contractual obligations represented by the Award are expressly assumed (and not simply by operation of law) by the successor entity or its Parent in connection with the Corporate Transaction with appropriate adjustments to the number and type of securities of the successor entity or its Parent subject to the Award and the exercise or purchase price thereof which at least preserves the compensation element of the Award existing at the time of the Corporate Transaction as determined in accordance with the instruments evidencing the agreement to assume the Award.
(e) “Award” means the grant of an Option, SAR, Dividend Equivalent Right, Restricted Stock, Restricted Stock Unit, Cash-Based Award or other right or benefit under the Plan.
(f) “Award Agreement” means the written agreement evidencing the grant of an Award executed by the Company and the Grantee, including any amendments thereto.
(g) “Board” means the Board of Directors of the Company.
(h) “Cash-Based Award” means an award denominated in cash that may be settled in cash and/or Shares, which may be subject to restrictions, as established by the Administrator.
(i) “Cause” means, with respect to the termination by the Company or a Related Entity of the Grantee’s Continuous Service, that such termination is for “Cause” as such term (or word of like import) is expressly defined in a then-effective written agreement between the Grantee and the Company or such Related Entity (including, but not limited to, the Award Agreement for a particular Award), or in the absence of such then-effective written agreement
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and definition, is based on, in the determination of the Administrator, the Grantee’s: (i) continued failure to perform the duties and responsibilities of his or her position after there has been delivered to the Grantee a written demand for performance from the Company which describes the basis for the Company’s belief that the Grantee has not substantially performed his or her duties and the Grantee has not corrected such failure within thirty (30) days of such written demand; (ii) dishonesty, intentional misconduct, breach of a confidentiality agreement with the Company or a Related Entity or material breach of any other agreement with the Company or a Related Entity; (iii) breach of any fiduciary duty owed to the Company by the Grantee that has a material detrimental effect on the Company’s reputation or business; or (iv) conviction of, or plea of nolo contendere to, a crime involving dishonesty, breach of trust, or physical or emotional harm to any person;provided,however, that with regard to any agreement that defines “Cause” on the occurrence of or in connection with a Corporate Transaction or a Change in Control, such definition of “Cause” shall not apply until a Corporate Transaction or a Change in Control actually occurs.
(j) “Change in Control” means a change in ownership or control of the Company effected through either of the following transactions:
(i) the direct or indirect acquisition by any person or related group of persons (other than an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership (within the meaning ofRule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the Company’s stockholders which a majority of the Continuing Directors who are not Affiliates or Associates of the offeror do not recommend such stockholders accept, or
(ii) a change in the composition of the Board over a period of twelve (12) months or less such that a majority of the Board members (rounded up to the next whole number) ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who are Continuing Directors.
provided that, for purposes of Awards granted hereunder that are subject to Section 409A and with respect to which payment or settlement of the Awards would occur in connection with the transaction, the transaction must also constitute a “change in the ownership or effective control, or in the ownership of a substantial portion of the assets” (as defined in Section 409A) of the Company.
(k) “Code” means the Internal Revenue Code of 1986, as amended.
(l) “Committee” means the Corporate Governance, Nominating and Compensation Committee of the Board.
(m) “Common Stock” means the common stock of the Company.
(n) “Company” means Raymond James Financial, Inc. a Florida corporation, or any successor entity that adopts the Plan in connection with a Corporate Transaction.
(o) “Continuing Directors” means members of the Board who either (i) have been Board members continuously for a period of at least twelve (12) months or (ii) have been Board members for less than twelve (12) months and were elected or nominated for election as Board members by at least a majority of the Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Board.
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(p) “Continuous Service” means that the provision of services to the Company or a Related Entity in any capacity of Employee, Director or Independent Contractor is not interrupted or terminated. In jurisdictions requiring notice in advance of an effective termination as an Employee, Director or Independent Contractor, Continuous Service shall be deemed terminated upon the actual cessation of providing services to the Company or a Related Entity notwithstanding any required notice period that must be fulfilled before a termination as an Employee, Director or Independent Contractor can be effective under Applicable Laws. A Grantee’s Continuous Service shall be deemed to have terminated either upon an actual termination of Continuous Service or upon the entity for which the Grantee provides services ceasing to be a Related Entity. Continuous Service shall not be considered interrupted in the case of (i) any approved leave of absence, (ii) transfers among the Company, any Related Entity, or any successor, in any capacity of Employee, Director or Independent Contractor, or (iii) any change in status as long as the individual remains in the service of the Company or a Related Entity in any capacity of Employee, Director or Independent Contractor (except as otherwise provided in the Award Agreement). Notwithstanding the foregoing, the Administrator may determine that, in the event of anyspin-off of a Related Entity, service as an Employee, Director or Independent Contractor for such Related Entity following suchspin-off shall be deemed to be Continuous Service for purposes of the Plan and any Award under the Plan. An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave. For purposes of each Incentive Stock Option granted under the Plan, if such leave exceeds three (3) months, and reemployment upon expiration of such leave is not guaranteed by statute or contract, then the Incentive Stock Option shall be treated as aNon-Qualified Stock Option on the day three (3) months and one (1) day following the expiration of such three (3) month period.
(q) “Corporate Transaction” means any of the following transactions,provided,however, that the Administrator shall determine under parts (iv) and (v) whether multiple transactions are related, and its determination shall be final, binding and conclusive:
(i) a merger or consolidation in which the Company is not the surviving entity or a share exchange in which the Company becomes a subsidiary of another entity, except for a transaction the principal purpose of which is to change the state in which the Company is incorporated;
(ii) the sale, transfer or other disposition of all or substantially all of the assets of the Company;
(iii) the complete liquidation or dissolution of the Company;
(iv) any reverse merger or series of related transactions culminating in a reverse merger (including, but not limited to, a tender offer followed by a reverse merger) in which the Company is the surviving entity but (A) the shares of Common Stock outstanding immediately prior to such merger are converted or exchanged by virtue of the merger into other property, whether in the form of securities, cash or otherwise, or (B) in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger or the initial transaction culminating in such merger, but excluding any such transaction or series of related transactions that the Administrator determines shall not be a Corporate Transaction; or
(v) acquisition in a single or series of related transactions by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but excluding any such transaction or series of related transactions that the Administrator determines shall not be a Corporate Transaction;
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provided that, for purposes of Awards granted hereunder that are subject to Section 409A and with respect to which payment or settlement of the Awards would occur in connection with the transaction, the transaction must also constitute a “change in the ownership or effective control, or in the ownership of a substantial portion of the assets” (as defined in Section 409A) of the Company.
(r) “Covered Employee” means an Employee who is a “covered employee” under Section 162(m)(3) of the Code.
(s) “Director” means a member of the Board or the board of directors of any Related Entity.
(t) “Disability” means, unless such term (or word of like import) is expressly defined in a then-effective written agreement between the Grantee and the Company or such Related Entity (including, but not limited to, the Award Agreement for a particular Award), a permanent and total disability as determined under the long-term disability plan of the Company or the Related Entity to which the Grantee provides services unless the Grantee is not a participant in such long-term disability plan or in the absence of such long-term disability plan, in which case, “Disability” means a mental or physical condition which totally and presumably permanently prevents the Grantee from engaging in any substantial gainful employment with the Company or the Related Entity to which the Grantee provides services prior to the inception of the disability;provided that, for purposes of Awards granted hereunder that are subject to Section 409A, “Disability” means a disability within the meaning of Code Section 409A(a)(2)(C) and Treasury regulation section1.409A-3(i)(4), as each may be amended from time to time. A Grantee will not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Administrator in its discretion.
(u) “Dividend Equivalent Right” means aright entitling the Grantee to compensation measured by dividends paid with respect to Common Stock,provided that no such right may be granted with respect to Options or SARs. Dividend Equivalent Rights granted in connection with Restricted Stock or Restricted Stock Units that performance vest shall be held subject to the vesting of the underlying Restricted Stock or Restricted Stock Units.
(v) “Employee” means any person, including an Officer or Director, who is in the employ of the Company or any Related Entity, subject to the control and direction of the Company or any Related Entity as to both the work to be performed and the manner and method of performance. The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to constitute “employment” by the Company.
(w) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(x) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows:
(i) If the Common Stock is listed on one or more established stock exchanges or national market systems, including without limitation The New York Stock Exchange, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on the principal exchange or system on which the Common Stock is listed (as determined by the Administrator) on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is regularly quoted on an automated quotation system (including the OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value shall be the closing sales price for such stock
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as quoted on such system or by such securities dealer on the date of determination, but if selling prices are not reported, the Fair Market Value of a share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the date of determination (or, if no such prices were reported on that date, on the last date such prices were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
(iii) In the absence of an established market for the Common Stock of the type described in (i) and (ii), above, the Fair Market Value thereof shall be determined by the Administrator in good faith; or
(iv) In lieu of the foregoing, the Administrator may, from time to time, select any other index or measurement that the Administrator determines in good faith represents an appropriate determination of the Fair Market Value per share of the Common Stock for purposes of the Plan.
(y) “Good Reason” means, with respect to the termination by the Grantee of the Grantee’s Continuous Service, that such termination is for “Good Reason” as such term (or word of like import) is expressly defined in a then- effective written agreement between the Grantee and the Company or such Related Entity (including, but not limited to, the Award Agreement for a particular Award), or in the absence of such then-effective written agreement and definition, a termination within ninety (90) days following the end of the Cure Period (as defined below) as a result of the occurrence of any of the following without the Grantee’s written consent: (i) a material diminution of the Grantee’s authority, duties, or responsibilities, relative to the Grantee’s authority, duties, or responsibilities in effect immediately prior to such reduction;provided,however, that a reduction of authority, duties, or responsibilities that occurs solely as a necessary and direct consequence of the Company undergoing a Corporate Transaction or Change of Control and being made part of a larger entity will not be considered material; (ii) a material diminution by the Company in the Grantee’s total cash and equity-based compensation as in effect immediately prior to such reduction; or (iii) the relocation of the Grantee to a facility or a location more than fifty (50) miles from his or her then present location that requires the Grantee to commute more than fifty (50) miles one way;provided,however, that the Grantee must provide written notice to the Company of the condition that could constitute a “Good Reason” event within ninety (90) days of the initial existence of such condition and such condition must not have been remedied by the Company within thirty (30) days (the “Cure Period”) of such written notice.
(z) “Grantee” means an Employee, Director or Independent Contractor who receives an Award under the Plan.
(aa) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.
(ab) “Independent Contractor” means any person entering into a registered representative contractual relationship with the Company or a Related Entity.
(ac) “Non-Qualified Stock Option” means an Option not intended to qualify as an Incentive Stock Option.
(ad) “Officer” means a person who is an officer of the Company or a Related Entity within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
(ae) “Option” means an option to purchase Shares pursuant to an Award Agreement granted under the Plan.
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(af) “Parent” means a “parent corporation”, whether now or hereafter existing, as defined in Section 424(e) of the Code.
(ag) “Performance Period” means the period of time during which the performance goals must be met in order to determine the degree of payout and/or vesting with respect to, or the amount or entitlement to, an Award.
(ah) “Plan” means this Amended and Restated 2012 Stock Incentive Plan.
(ai) “Predecessor Plans” means the Company’s 1996 Stock Option Plan for Key Management Personnel, 2007 Stock Option Plan for Independent Contractors, 2002 Incentive Stock Option Plan, Stock Option Plan for Outside Directors, 2005 Restricted Stock Plan, and 2007 Stock Bonus Plan.
(aj) “Related Entity” means any Parent or Subsidiary of the Company.
(ak) “Replaced” means that pursuant to a Corporate Transaction the Award is replaced with a comparable stock or cash award or a cash incentive program of the Company, the successor entity (if applicable) or Parent of either of them which preserves the compensation element of such Award existing at the time of the Corporate Transaction and provides for subsequent payout in accordance with the same (or a more favorable) vesting schedule applicable to such Award. The determination of Award comparability shall be made by the Administrator and its determination shall be final, binding and conclusive.
(al) “Restricted Stock” means Shares issued under the Plan to the Grantee for such consideration, if any, and subject to such restrictions on transfer, rights of first refusal, repurchase provisions, forfeiture provisions, and other terms and conditions as established by the Administrator. Dividends payable with respect to Restricted Stock subject to performance vesting shall be held subject to the vesting of the underlying Shares.
(am) “Restricted Stock Units” means an Award which may be earned in whole or in part upon the passage of time or the attainment of performance criteria established by the Administrator and which may be settled for cash, Shares or other securities or a combination of cash, Shares or other securities as established by the Administrator.
(an) “Retirement” means, unless such term (or word of like import) is expressly defined in a then-effective written agreement between the Grantee and the Company or such Related Entity (including, but not limited to, the Award Agreement for a particular Award), (i) in the case of an Employee or Independent Contractor, a Grantee’s voluntary Separation from Service or involuntary Separation from Service other than for Cause from the Company or any Related Entity after (A) attainment of age 65 or (B) attainment of age 60 after fifteen (15) years of service with the Company or a Related Entity either as an Employee or Independent Contractor, and (ii) in the case of a non-employee Director, a Grantee’s voluntary Separation from Service from the Company after attainment of age 72 or twelve (12) years of service as a Director with the Company.
(ao) “Rule16b-3” means Rule16b-3 promulgated under the Exchange Act or any successor thereto.
(ap) “SAR” means a stock appreciation right entitling the Grantee to Shares or cash compensation, as established by the Administrator, measured by appreciation in the value of Common Stock.
(aq) “Section 409A” means Section 409A of the Code, and any proposed, temporary or final Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from time to time.
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(ar) “Separation from Service” means a termination of Continuous Service from the Company and its Related Entities;provided that, for purposes of Awards granted hereunder that are subject to Section 409A, a “Separation from Service” means a Grantee’s death, retirement or other termination of employment or service with the Company and its Related Entities (as determined in accordance with Code Section 409A(2)(A)(i) and Treasury regulation section 1.409A(h), as each may be amended from time to time).
(as) “Share” means a share of the Common Stock.
(at) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan.
(a) Subject to the provisions of Section 10, below, the maximum aggregate number of Shares which may be issued pursuant to all Awards is 52,243,944 Shares, plus the number of Shares that remained available for grants of awards under the Predecessor Plans as of the date the Plan was originally approved by the Company’s stockholders (8,843,944);provided,however, that the maximum aggregate number of Shares that may be issued pursuant to Incentive Stock Options is 26,400,000 Shares. Notwithstanding the foregoing, any Shares issued in connection with Awards granted on or after the effective date of the Plan (as determined in accordance with Section 12) other than Options and SARs shall be counted against the limit set forth herein as 2.8 Shares for every one (1) Share issued in connection with such Award (and shall be counted as 2.8 Shares for every one (1) Share returned or deemed not have been issued from the Plan pursuant to Section 3(b) below in connection with Awards granted on or after the effective date of the Plan (as determined in accordance with Section 12) other than Options and SARs). The Shares to be issued pursuant to Awards may be authorized, but unissued, or reacquired Common Stock.
(b) Any Shares covered by an Award (or portion of an Award) which is forfeited, canceled or expires (whether voluntarily or involuntarily) shall be deemed not to have been issued for purposes of determining the maximum aggregate number of Shares which may be issued under the Plan. Shares that have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall not become available for future issuance under the Plan, except that if unvested Shares are forfeited, or repurchased by the Company at the lower of their original purchase price or their Fair Market Value at the time of repurchase, such Shares shall become available for future grant under the Plan. Notwithstanding anything to the contrary contained herein: (i) Shares tendered or withheld in payment of an Option exercise price shall not be returned to the Plan and shall not become available for future issuance under the Plan; (ii) Shares withheld by the Company to satisfy any tax withholding obligation shall not be returned to the Plan and shall not become available for future issuance under the Plan; and (iii) all Shares covered by the portion of an SAR that is exercised (whether or not Shares are actually issued to the Grantee upon exercise of the SAR) shall be considered issued pursuant to the Plan.
4. Administration of the Plan.
(a) Plan Administrator.
(i) Administration with Respect to Directors and Officers. With respect to grants of Awards to Directors or Employees who are also Officers or Directors of the Company, the Plan shall be administered by the Committee which shall be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3.
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(ii) Administration With Respect to Independent Contractors and Other Employees. With respect to grants of Awards to Employees or Independent Contractors who are neither Directors nor Officers of the Company, the Plan shall be administered by the Committee which shall be constituted in such a manner as to satisfy the Applicable Laws. The Board may authorize one or more Officers to grant such Awards and may limit such authority as the Board determines from time to time.
(iii) Administration Errors. In the event an Award is granted in a manner inconsistent with the provisions of this subsection (a), such Award shall be presumptively valid as of its grant date to the extent permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to Applicable Laws and the provisions of the Plan (including any other powers given to the Administrator hereunder), and except as otherwise provided by the Board, the Administrator shall have the authority, in its discretion:
(i) to select the Employees, Directors and Independent Contractors to whom Awards may be granted from time to time hereunder;
(ii) to determine whether and to what extent Awards are granted hereunder;
(iii) to determine the number of Shares or the amount of cash or other consideration to be covered by each Award granted hereunder;
(iv) to approve forms of Award Agreements for use under the Plan;
(v) to determine the terms and conditions of any Award granted hereunder;
(vi) to amend or waive the terms of any outstanding Award granted under the Plan, as to any Grantee or class of Grantees,provided that (A) any amendment that would adversely affect the Grantee’s rights under an outstanding Award shall not be made without the Grantee’s written consent,provided,however, that an amendment or modification that may cause an Incentive Stock Option to become aNon-Qualified Stock Option shall not be treated as adversely affecting the rights of the Grantee (B) the reduction of the exercise price of any Option awarded under the Plan and the base appreciation amount of any SAR awarded under the Plan shall be subject to stockholder approval and (C) canceling an Option or SAR at a time when its exercise price or base appreciation amount (as applicable) exceeds the Fair Market Value of the underlying Shares, in exchange for another Option, SAR, Restricted Stock, or cash buyout or other Award shall be subject to stockholder approval, unless the cancellation and exchange occurs in connection with a Corporate Transaction. Notwithstanding the foregoing, canceling an Option or SAR in exchange for another Option, SAR, Restricted Stock, or other Award with an exercise price, purchase price or base appreciation amount (as applicable) that is equal to or greater than the exercise price or base appreciation amount (as applicable) of the original Option or SAR shall not be subject to stockholder approval;
(vii) to construe and interpret the terms of the Plan and Awards, including without limitation, any notice of award or Award Agreement, granted pursuant to the Plan;
(viii) to grant Awards to Employees, Directors and Independent Contractors employed outside the United States on such terms and conditions different from those specified in the Plan as may, in the judgment of the Administrator, be necessary or desirable to further the purpose of the Plan;
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(ix) to take such other action, not inconsistent with the terms of the Plan, as the Administrator deems appropriate; and
(x) to establish or to cause to be established a trust for purpose of purchasing Shares on the open market, holding such Shares and using such Shares to satisfy the Company’s obligations under grants of Restricted Stock Units;provided that, if the trust is established to satisfy the Company’s obligations with respect to grants of Restricted Stock Units to Participants resident in Canada, such trust may be structured to qualify as an “employee benefit plan” within the meaning assigned by the Income Tax Act (Canada).
The express grant in the Plan of any specific power to the Administrator shall not be construed as limiting any power or authority of the Administrator; provided that the Administrator may not exercise any right or power reserved to the Board. Any decision made, or action taken, by the Administrator or in connection with the administration of this Plan shall be final, conclusive and binding on all persons having an interest in the Plan.
(c) Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or as Officers or Employees of the Company or a Related Entity, members of the Board and any Officers or Employees of the Company or a Related Entity to whom authority to act for the Board, the Administrator or the Company is delegated shall be defended and indemnified by the Company to the extent permitted by law on anafter-tax basis against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any claim, investigation, action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any Award granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by the Company) or paid by them in satisfaction of a judgment in any such claim, investigation, action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such claim, investigation, action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct;provided,however, that within thirty (30) days after the institution of such claim, investigation, action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at the Company’s expense to defend the same.
5. Eligibility. Awards other than Incentive Stock Options may be granted to Employees, Directors and Independent Contractors. Incentive Stock Options may be granted only to Employees of the Company or a Parent or a Subsidiary of the Company. An Employee, Director or Independent Contractor who has been granted an Award may, if otherwise eligible, be granted additional Awards. Awards may be granted to such Employees, Directors or Independent Contractors who are residing innon-U.S. jurisdictions as the Administrator may determine from time to time.
6. Terms and Conditions of Awards.
(a) Types of Awards. The Administrator is authorized under the Plan to award any type of arrangement to an Employee, Director or Independent Contractor that is not inconsistent with the provisions of the Plan and that by its terms involves or might involve the issuance of (i) Shares, (ii) cash, or (iii) an Option, a SAR, or similar right with a fixed or variable price related to the Fair Market Value of the Shares and with an exercise or conversion privilege related to the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions. Such awards include, without limitation, Options, SARs, sales or bonuses of Restricted Stock, Restricted Stock Units or Dividend Equivalent Rights, Cash-Based Awards and an Award may consist of one such security or benefit, or two (2) or more of them in any combination or alternative.
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(b) Designation of Award. Each Award shall be designated in the Award Agreement. In the case of an Option, the Option shall be designated as either an Incentive Stock Option or aNon-Qualified Stock Option. However, notwithstanding such designation, an Option will qualify as an Incentive Stock Option under the Code only to the extent the $100,000 limitation of Section 422(d) of the Code is not exceeded. The $100,000 limitation of Section 422(d) of the Code is calculated based on the aggregate Fair Market Value of the Shares subject to Options designated as Incentive Stock Options which become exercisable for the first time by a Grantee during any calendar year (under all plans of the Company or any Parent or Subsidiary of the Company). For purposes of this calculation, Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares shall be determined as of the grant date of the relevant Option. In the event that the Code or the regulations promulgated thereunder are amended after the date the Plan becomes effective to provide for a different limit on the Fair Market Value of Shares permitted to be subject to Incentive Stock Options, then such different limit will be automatically incorporated herein and will apply to any Options granted after the effective date of such amendment.
(c) Conditions of Award. Subject to the terms of the Plan, the Administrator shall determine the provisions, terms, and conditions of each Award including, but not limited to, the Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form of payment (cash, Shares, or other consideration) upon settlement of the Award, payment contingencies, and satisfaction of any performance criteria. The performance criteria may be applicable to the Company, Related Entities and/or any individual business units of the Company or any Related Entity. Partial achievement of the specified criteria may result in a payment or vesting corresponding to the degree of achievement as specified in the Award Agreement. In addition, the performance criteria shall be calculated in accordance with generally accepted accounting principles, but excluding the effect (whether positive or negative) of any change in accounting standards and any extraordinary, unusual or nonrecurring item, as determined by the Administrator.
(d) Acquisitions and Other Transactions. The Administrator may issue Awards under the Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant future awards in connection with the Company or a Related Entity acquiring another entity, an interest in another entity or an additional interest in a Related Entity whether by merger, stock purchase, asset purchase or other form of transaction.
(e) Deferral of Award Payment. The Administrator may establish one or more programs under the Plan to permit selected Grantees the opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that absent the election would entitle the Grantee to payment or receipt of Shares, cash or other consideration under an Award. The Administrator may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, Shares or other consideration so deferred, and such other terms, conditions, rules and procedures that the Administrator deems advisable for the administration of any such deferral program.
(f) Separate Programs. The Administrator may establish one or more separate programs under the Plan for the purpose of issuing particular forms of Awards to one or more classes of Grantees on such terms and conditions as determined by the Administrator from time to time.
(g) Individual Limitations on Awards.
(i) Individual Limit for Options and SARs. The maximum number of Shares with respect to which Options and SARs may be granted to any Grantee in each successive twelve (12) month period shall be 200,000 Shares.
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In connection with a Grantee’s commencement of Continuous Service, a Grantee may be granted Options and SARs for up to a maximum of 400,000 Shares. The foregoing limitations shall be adjusted proportionately in connection with any change in the Company’s capitalization pursuant to Section 10, below. To the extent required by Section 162(m) of the Code or the regulations thereunder, in applying the foregoing limitations with respect to a Grantee, if any Option or SAR is canceled, the canceled Option or SAR shall continue to count against the maximum number of Shares with respect to which Options and SARs may be granted to the Grantee. For this purpose, the repricing of an Option (or in the case of a SAR, the base amount on which the stock appreciation is calculated is reduced to reflect a reduction in the Fair Market Value of the Common Stock) shall be treated as the cancellation of the existing Option or SAR and the grant of a new Option or SAR.
(ii) Individual Limit for Restricted Stock and Restricted Stock Units. For awards of Restricted Stock and Restricted Stock Units, the maximum number of Shares that may be issued to a Grantee pursuant to such Awards with respect to a successive twelve (12) month period shall be 200,000 Shares. In connection with a Grantee’s commencement of Continuous Service, up to a maximum of 400,000 Shares may be issued to the Grantee with respect to a successive twelve (12) month period relating to such commencement. The foregoing limitations shall be adjusted proportionately in connection with any change in the Company’s capitalization pursuant to Section 10, below.
(iii) Individual Limit for Cash-Based Awards. For Cash-Based Awards, with respect to each twelve (12) month period that constitutes or is part of each Performance Period, the maximum amount that may be paid to a Grantee pursuant to such Awards with respect to a successive twelve (12) month period shall be $5,000,000. The foregoing limitation shall be adjusted proportionately in connection with any change in the Company’s capitalization pursuant to Section 10 below.
(h) Deferral. If the vesting or receipt of Shares or cash under an Award is deferred to a later date, any amount (whether denominated in Shares or cash) paid in addition to the original number of Shares or amount of cash subject to such Award will not be treated as an increase in the number of Shares or amount of cash subject to the Award if the additional amount is based either on a reasonable rate of interest or on one or more predetermined actual investments such that the amount payable by the Company at the later date will be based on the actual rate of return of a specific investment (including any decrease as well as any increase in the value of an investment).
(i) Early Exercise. The Award Agreement may, but need not, include a provision whereby the Grantee may elect at any time while an Employee, Director or Independent Contractor to exercise any part or all of the Award prior to full vesting of the Award. Any unvested Shares received pursuant to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity or to any other restriction the Administrator determines to be appropriate.
(j) Term of Award. The term of each Award shall be the term stated in the Award Agreement,provided,however, that the term of an Option or SAR shall be no more than seven (7) years from the date of grant thereof and the term of an Award other than an Option or SAR shall be no more than ten (10) years from the date of grant thereof. However, in the case of an Incentive Stock Option granted to a Grantee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the term of the Incentive Stock Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Award Agreement. Notwithstanding the foregoing, the specified term of any Award shall not include any period for which the Grantee has elected to defer the receipt of the Shares or cash issuable pursuant to the Award.
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(k) Transferability of Awards. Awards may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Grantee, only by the Grantee. Notwithstanding the foregoing, the Grantee may designate one or more beneficiaries of the Grantee’s Award in the event of the Grantee’s death on a beneficiary designation form provided by the Administrator.
(l) Time of Granting Awards. The date of grant of an Award shall for all purposes be the date on which the Administrator makes the determination to grant such Award, or such other later date as is determined by the Administrator.
(m) Additional Restrictions and Conditions. Awards, and the Shares or cash issued or issuable thereunder, shall be subject to the restrictions and conditions set forth in the underlying contracts with the Grantee and/or set forth in the Award Agreement for such Awards.
7. Award Exercise or Purchase Price, Consideration and Taxes.
(a) Exercise or Purchase Price. The exercise or purchase price, if any, for an Award shall be as follows:
(i) In the case of an Incentive Stock Option:
(A) granted to an Employee who, at the time of the grant of such Incentive Stock Option owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary of the Company, the per Share exercise price shall be not less than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or
(B) granted to any Employee other than an Employee described in the preceding paragraph, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.
(ii) In the case of aNon-Qualified Stock Option, the per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.
(iii) In the case of SARs, the base appreciation amount shall not be less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.
(iv) In the case of other Awards, such price as is determined by the Administrator.
(v) Notwithstanding the foregoing provisions of this Section 7(a), in the case of an Award issued pursuant to Section 6(d), above, the exercise or purchase price for the Award shall be determined in accordance with the provisions of the relevant instrument evidencing the agreement to issue such Award.
(b) Consideration. Subject to Applicable Laws, the consideration to be paid for the Shares to be issued upon exercise or purchase of an Award including the method of payment, shall be determined by the Administrator.
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(i) In the case of an Award other than an Incentive Stock Option, in addition to any other types of consideration the Administrator may determine, the Administrator is authorized to accept as consideration for Shares issued under the Plan the following:
(A) cash through the Grantee’s Raymond James brokerage account, which must contain sufficient funds or margin availability to cover the consideration to be paid for the Shares to be issued upon exercise or purchase of an Award;
(B) surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require which have a Fair Market Value on the date of surrender or attestation equal to the aggregate exercise price of the Shares as to which said Award shall be exercised;
(C) with respect to Options, payment through a broker-dealer sale and remittance procedure pursuant to which the Grantee (1) shall provide written instructions to a Company designated brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares and (2) shall provide written directives to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm in order to complete the sale transaction;
(D) with respect to Options, payment through a “net exercise” such that, without the payment of any funds, the Grantee may exercise the Option and receive the net number of Shares equal to (i) the number of Shares as to which the Option is being exercised, multiplied by (ii) a fraction, the numerator of which is the Fair Market Value per Share (on such date as is determined by the Administrator) less the exercise price per Share, and the denominator of which is such Fair Market Value per Share (the number of net Shares to be received shall be rounded down to the nearest whole number of Shares); or
(E) any combination of the foregoing methods of payment.
(ii) In the case of an Incentive Stock Option, the Administrator is authorized to accept as consideration for Shares issued under the Plan the following:
(A) cash through the Grantee’s Raymond James brokerage account, which must contain sufficient funds or margin availability to cover the consideration to be paid for the Shares to be issued upon exercise or purchase of the Incentive Stock Option; or
(B) surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Administrator may require which have a Fair Market Value on the date of surrender or attestation equal to the aggregate exercise price of the Shares as to which said Incentive Stock Option shall be exercised.
The Administrator may at any time or from time to time, by adoption of or by amendment to the standard forms of Award Agreement described in Section 4(b)(iv), or by other means, grant Awards which do not permit all of the foregoing forms of consideration to be used in payment for the Shares or which otherwise restrict one or more forms of consideration.
(c) Taxes. No Shares or cash shall be delivered under the Plan to any Grantee or other person until such Grantee or other person has made arrangements acceptable to the Administrator for the satisfaction of any
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non-U.S., federal, state, or local income and employment tax withholding obligations, including, without limitation, obligations incident to the receipt of Shares or cash. Upon exercise or vesting of an Award the Company shall withhold or collect from the Grantee an amount sufficient to satisfy such tax obligations, including, but not limited to, by surrender of the whole number of Shares covered by the Award, if applicable, sufficient to satisfy the minimum applicable tax withholding obligations incident to the exercise or vesting of an Award (reduced to the lowest whole number of Shares if such number of Shares withheld would result in withholding a fractional Share with any remaining tax withholding settled in cash).
8. Exercise of Award.
(a) Procedure for Exercise.
(i) Any Award granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator under the terms of the Plan and specified in the Award Agreement.
(ii) An Award shall be deemed to be exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Award by the person entitled to exercise the Award and full payment for the Shares with respect to which the Award is exercised has been made, including, to the extent selected, use of the broker-dealer sale and remittance procedure to pay the purchase price as provided in Section 7(b)(i)(C).
(b) Exercise of Award Following Termination of Continuous Service.
(i) An Award may not be exercised after the termination date of such Award set forth in the Award Agreement and may be exercised following the termination of a Grantee’s Continuous Service only to the extent provided in the Award Agreement.
(ii) Where the Award Agreement permits a Grantee to exercise an Award following the termination of the Grantee’s Continuous Service for a specified period, the Award shall terminate to the extent not exercised on the last day of the specified period or the last day of the original term of the Award, whichever occurs first.
(iii) Any Award designated as an Incentive Stock Option to the extent not exercised within the time permitted by law for the exercise of Incentive Stock Options following the termination of a Grantee’s Continuous Service shall convert automatically to aNon-Qualified Stock Option and thereafter shall be exercisable as such to the extent exercisable by its terms for the period specified in the Award Agreement.
9. Conditions Upon Issuance of Shares.
(a) If at any time the Administrator determines that the delivery of Shares pursuant to the exercise, vesting or any other provision of an Award is or may be unlawful under Applicable Laws, the vesting or right to exercise an Award or to otherwise receive Shares pursuant to the terms of an Award shall be suspended until the Administrator determines that such delivery is lawful and shall be further subject to the approval of counsel for the Company with respect to such compliance. The Company shall have no obligation to effect any registration or qualification of the Shares under federal or state laws.
(b) As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and
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without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any Applicable Laws.
10. Adjustments Upon Changes in Capitalization. Subject to any required action by the stockholders of the Company and Section 11 hereof, the number of Shares covered by each outstanding Award, and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan, the exercise or purchase price of each such outstanding Award, the numerical limits set forth in Section 6(g), as well as any other terms that the Administrator determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, recapitalization, combination or reclassification of the Shares, or similar transaction affecting the Shares, (ii) any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company, or (iii) any other transaction with respect to Common Stock including a corporate merger, consolidation, acquisition of property or stock, separation (including aspin-off or other distribution of stock or property), reorganization, liquidation (whether partial or complete) or any similar transaction;provided,however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” In the event of any distribution of cash or other assets to stockholders other than a normal cash dividend, the Administrator shall also make such adjustments as provided in this Section 10 or substitute, exchange or grant Awards to effect such adjustments (collectively “adjustments”). Any such adjustments to outstanding Awards will be effected in a manner that precludes the enlargement of rights and benefits under such Awards. In connection with the foregoing adjustments, the Administrator may, in its discretion, prohibit the exercise of Awards or other issuance of Shares, cash or other consideration pursuant to Awards during certain periods of time. Except as the Administrator determines, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price of Shares subject to an Award.
11. Corporate Transactions and Changes in Control.
(a) Termination of Award to Extent Not Assumed in Corporate Transaction. Effective upon the consummation of a Corporate Transaction, all outstanding Awards under the Plan shall terminate. However, all such Awards shall not terminate to the extent they are Assumed in connection with the Corporate Transaction.
(b) Acceleration of Award Upon Corporate Transaction or Change in Control.
(i) Corporate Transaction. Except as provided otherwise in an individual Award Agreement, in the event of a Corporate Transaction and:
(A) for the portion of each Award that was granted in lieu of a cash payment for all or a portion of a Grantee’s annual bonus (as determined by the Administrator and designated in the Award Agreement) and that is Assumed or Replaced, then such Award (if Assumed), the replacement Award (if Replaced), or the cash incentive program (if Replaced) automatically shall become fully vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Shares (or other consideration) at the time represented by such Assumed or Replaced portion of the Award, immediately upon the Grantee’s Separation from Service if such service is terminated by the successor company or the Company without Cause or voluntarily by the Grantee with Good Reason on or within eighteen (18) months after the Corporate Transaction; and
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(B) for the portion of each Award that was not granted in lieu of a cash payment for all or a portion of a Grantee’s cash annual bonus and that is Assumed or Replaced, then apro-rated amount of the unvested Shares or other consideration subject to such Award (if Assumed), the replacement Award (if Replaced), or the cash incentive program (if Replaced) automatically shall become fully vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) immediately upon the Grantee’s Separation from Service if such service is terminated by the successor company or the Company without Cause or voluntarily by the Grantee with Good Reason on or within eighteen (18) months after the Corporate Transaction. For this purpose, thepro-rated amount will be determined by comparing completed, full months of service, if any, since the grant date of the Award to the vesting schedule or restricted period set forth in the Award Agreement; and
(C) for the portion of each Award that is neither Assumed nor Replaced, such portion of the Award shall automatically become fully vested and exercisable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Shares (or other consideration) at the time represented by such portion of the Award, immediately prior to the specified effective date of such Corporate Transaction,provided that the Grantee’s Continuous Service has not terminated prior to such date. For Awards that have an exercise feature, the portion of the Award that is not Assumed shall terminate under subsection (a) of this Section 11 to the extent not exercised prior to the consummation of such Corporate Transaction.
(ii) Change in Control. Except as provided otherwise in an individual Award Agreement, in the event of a Change in Control and:
(A) for the portion of each Award that was granted in lieu of a cash payment for all or a portion of a Grantee’s annual bonus (as determined by the Administrator and designated in the Award Agreement), then such Award automatically shall become fully vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) for all of the Shares (or other consideration) at the time represented by such Award, immediately upon the Grantee’s Separation from Service if such service is terminated by the successor company or the Company without Cause or voluntarily by the Grantee with Good Reason on or within eighteen (18) months after the Change in Control; and
(B) for the portion of each Award that was not granted in lieu of a cash payment for all or a portion of a Grantee’s cash annual bonus, then apro-rated amount of the unvested Shares or other consideration subject to such Award automatically shall become fully vested, exercisable and payable and be released from any repurchase or forfeiture rights (other than repurchase rights exercisable at Fair Market Value) immediately upon the Grantee’s Separation from Service if such service is terminated by the successor company or the Company without Cause or voluntarily by the Grantee with Good Reason on or within eighteen (18) months after the Change in Control. For this purpose, thepro-rated amount will be determined by comparing completed, full months of service, if any, since the grant date of the Award to the vesting schedule or restricted period set forth in the Award Agreement.
(c) Effect of Acceleration on Incentive Stock Options. Any Incentive Stock Option accelerated under this Section 11 in connection with a Corporate Transaction or Change in Control shall remain exercisable as an Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded.
A-16 | Raymond James Financial, Inc. 2020 Proxy Statement
12. Effective Date and Term of Plan. The Plan originally became effective on November 22, 2011. It shall continue in effect for a term of ten (10) years from February 18, 2016, unless sooner terminated. Subject to Section 17, below, and Applicable Laws, Awards may be granted under the Plan upon its becoming effective.
13. Amendment, Suspension or Termination of the Plan.
(a) The Board may at any time amend, suspend or terminate the Plan;provided,however, that no such amendment shall be made without the approval of the Company’s stockholders to the extent such approval is required by Applicable Laws, or if such amendment would lessen the stockholder approval requirements of Section 4(b)(vi) or this Section 13(a).
(b) No Award may be granted during any suspension of the Plan or after termination of the Plan.
(c) No suspension or termination of the Plan (including termination of the Plan under Section 11, above) shall adversely affect any rights under Awards already granted to a Grantee.
14. Reservation of Shares.
(a) The Company, during the term of the Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.
(b) The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.
15. No Effect on Terms of Employment/Consulting Relationship. The Plan shall not confer upon any Grantee any right with respect to the Grantee’s Continuous Service, nor shall it interfere in any way with his or her right or the right of the Company or any Related Entity to terminate the Grantee’s Continuous Service at any time, with or without cause including, but not limited to, Cause, and with or without notice. The ability of the Company or any Related Entity to terminate the employment of a Grantee who is employed at will is in no way affected by its determination that the Grantee’s Continuous Service has been terminated for Cause for the purposes of this Plan.
16. No Effect on Retirement and Other Benefit Plans. Except as specifically provided in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation. The Plan is not a “Pension Plan” or “Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended.
17. Stockholder Approval. The grant of Incentive Stock Options under the Plan shall be subject to approval by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted excluding Incentive Stock Options issued in substitution for outstanding Incentive Stock Options pursuant to Section 424(a) of the Code. Such stockholder approval shall be obtained in the degree and manner required under Applicable Laws. The Administrator may grant Incentive Stock Options under the Plan prior to approval by the stockholders, but until such approval is obtained, no such Incentive Stock Option shall be exercisable. In the event that stockholder approval is not obtained within the twelve (12) month period provided above, all Incentive Stock Options previously granted under the Plan shall be exercisable asNon-Qualified Stock Options.
Raymond James Financial, Inc. 2020 Proxy Statement | A-17
18. Unfunded Obligation. Grantees shall have the status of general unsecured creditors of the Company. Any amounts payable to Grantees pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without limitation, Title I of the Employee Retirement Income Security Act of 1974, as amended. Neither the Company nor any Related Entity shall be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any trust or any Grantee account shall not create or constitute a trust or fiduciary relationship between the Administrator, the Company or any Related Entity and a Grantee, or otherwise create any vested or beneficial interest in any Grantee or the Grantee’s creditors in any assets of the Company or a Related Entity. The Grantees shall have no claim against the Company or any Related Entity for any changes in the value of any assets that may be invested or reinvested by the Company with respect to the Plan.
19. Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.
20. Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board, the submission of the Plan to the stockholders of the Company for approval, nor any provision of the Plan will be construed as creating any limitations on the power of the Board to adopt such additional compensation arrangements as it may deem desirable, including, without limitation, the granting of Awards otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases.
A-18 | Raymond James Financial, Inc. 2020 Proxy Statement
APPENDIX B
Raymond James Financial, Inc.
Reconciliation of GAAP financial measures tonon-GAAP measures
(unaudited)
We utilize certainnon-GAAP financial measures to aid in, and enhance, the understanding of our financial results. Thesenon-GAAP financial measures include adjusted net income, adjusted earnings per diluted share, and adjusted return on equity. We believe that each of thesenon-GAAP financial measures provides useful information to investors and management by excluding certain material items that are not indicative of our core operating results. We utilize thesenon-GAAP financial measures in assessing the financial performance of the business, as they facilitate a more meaningful comparison of current- and prior-period results. In the following table, the tax effect ofnon-GAAP adjustments reflects the statutory rate associated with eachnon-GAAP item. Thesenon-GAAP financial measures should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. In addition, ournon-GAAP financial measures may not be comparable to similarly titlednon-GAAP financial measures of other companies. The following table provides a reconciliation of GAAP financial measures tonon-GAAP measures for those periods which includenon-GAAP adjustments.
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| | | Year ended September 30, | |
$ in millions, except per share amounts | | 2019 | | | 2018 | | | 2017 | |
Net income | | $ | 1,034 | | | $ | 857 | | | $ | 636 | |
Non-GAAP adjustments: | | | | | | | | | | | | |
Acquisition and disposition-related expenses(1) | | | 15 | | | | 4 | | | | 18 | |
Goodwill impairment(2) | | | 19 | | | | — | | | | — | |
Losses on extinguishment of debt(3) | | | — | | | | — | | | | 46 | |
Jay Peak matter(4) | | | — | | | | — | | | | 130 | |
Tax effect ofnon-GAAP adjustments | | | — | | | | (1 | ) | | | (62) | |
Impact of the Tax Act(5) | | | — | | | | 105 | | | | — | |
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Totalnon-GAAP adjustments, net of tax | | | 34 | | | | 108 | | | | 132 | |
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Adjusted net income | | $ | 1,068 | | | $ | 965 | | | $ | 768 | |
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Earnings per diluted share | | $ | 7.17 | | | $ | 5.75 | | | $ | 4.33 | |
Non-GAAP adjustments: | | | | | | | | | | | | |
Acquisition and disposition-related expenses(1) | | | 0.10 | | | | 0.03 | | | | 0.12 | |
Goodwill impairment(2) | | | 0.13 | | | | — | | | | — | |
Losses on extinguishment of debt(3) | | | — | | | | — | | | | 0.31 | |
Jay Peak matter(4) | | | — | | | | — | | | | 0.89 | |
Tax effect ofnon-GAAP adjustments | | | — | | | | (0.01 | ) | | | (0.42) | |
Impact of the Tax Act(5) | | | — | | | | 0.70 | | | | — | |
| | | | | | | | | | | | | |
Totalnon-GAAP adjustments, net of tax | | | 0.23 | | | | 0.72 | | | | 0.90 | |
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Adjusted earnings per diluted share | | $ | 7.40 | | | $ | 6.47 | | | $ | 5.23 | |
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Raymond James Financial, Inc. 2020 Proxy Statement | B-1
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| | | Year ended September 30, | |
$ in millions, except per share amounts | | 2019 | | | 2018 | | | 2017 | |
Return on equity | | | | | | | | | | | | |
Average equity(6) | | $ | 6,392 | | | $ | 5,949 | | | $ | 5,235 | |
Non-GAAP adjustments: | | | | | | | | | | | | |
Acquisition and disposition-related expenses(1) | | | 12 | | | | 3 | | | | 12 | |
Goodwill impairment(2) | | | 4 | | | | — | | | | — | |
Losses on extinguishment of debt(3) | | | — | | | | — | | | | 12 | |
Jay Peak matter(4) | | | — | | | | — | | | | 84 | |
Tax effect ofnon-GAAP adjustments | | | — | | | | (1 | ) | | | (33) | |
Impact of the Tax Act(5) | | | — | | | | 92 | | | | — | |
| | | | | | | | | | | | | |
Totalnon-GAAP adjustments, net of tax | | | 16 | | | | 94 | | | | 75 | |
| | | | | | | | | | | | | |
Adjusted average equity(6) | | $ | 6,408 | | | $ | 6,043 | | | $ | 5,310 | |
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Return on equity(7) | | | 16.2 | % | | | 14.4 | % | | | 12.2% | |
Adjusted return on equity(7) | | | 16.7 | % | | | 16.0 | % | | | 14.5% | |
Footnotes
| (1) | The year ended September 30, 2019 included apre-tax loss in our Capital Markets segment on the sale of our operations related to research, sales and trading of European equities. The years ended September 30, 2018 and 2017, included acquisition-related expenses associated with our November 2018 acquisition of Scout Investments and its Reams Asset Management division, as well as certain expenses associated with our 2016 acquisitions of the U.S. Private Client Services unit of Deutsche Bank and MacDougall, MacDougall & MacTier, Inc. |
| (2) | Other expenses in the year ended September 30, 2019 included a $19 million impairment charge associated with our Canadian Capital Markets business. |
| (3) | Losses on extinguishment of debt include a make-whole premium and the acceleration of unamortized debt issuance costs associated with the early extinguishment of our 8.60% Senior Notes due 2019 and 6.90% Senior Notes due 2042. |
| (4) | Other expenses in the year ended September 30, 2017 included $130 million in legal expenses associated with Jay Peak settlement. For further information see our Annual Report on Form10-K for the year ended September 30, 2017 (available atwww.sec.gov). |
| (5) | The impact of the Tax Act includes the remeasurement of U.S. deferred tax assets at the lower enacted corporate tax rate and, to a lesser extent, aone-time transition tax on deemed repatriated earnings of foreign subsidiaries. |
| (6) | Computed by adding the total equity attributable to Raymond James Financial, Inc. as of eachquarter-end date during the indicated fiscal year to the beginning of the year total and dividing by five. Adjusted average equity is computed by adjusting for the impact on average equity of thenon-GAAP adjustments, as applicable for each respective year. |
| (7) | Computed by dividing net income by average equity for each respective period or, in the case of adjusted return on equity, computed by dividing adjusted net income by adjusted average equity for each respective period. |
B-2 | Raymond James Financial, Inc. 2020 Proxy Statement
INTERNATIONAL HEADQUARTERS: THE RAYMOND JAMES FINANCIAL CENTER
880 CARILLON PARKWAY // ST. PETERSBURG, FL 33716 // 800.248.8863
RAYMONDJAMES.COM
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| | | | | | Your vote matters – here’s how to vote! |
| | | | | | You may vote online or by phone instead of mailing this card. |
| | | | | |  | | Votes submitted electronically must be received by 1:00 a.m., Central Time, on February 20, 2020. (5:00 p.m. Eastern Time, February 17, 2020 for ESOP Plan participants). |
| | | | |
| | | | | | | | Online Go towww.investorvote.com/RJF or scan the QR code – login details are located in the shaded bar below. |
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| | | | | |  | | Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada |
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| Using ablack ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. | |  | | | |  | | Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/RJF |
q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
| | |
 | | Proposals – The Board of Directors recommends a voteFORall the nominees listed andFOR Proposals 2, 3 and 4. |
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| 1. | | Nominees*: | | For | | Against | | Abstain | | | | | | For | | Against | | Abstain | | | | | | For | | Against | | Abstain | | | | + | | |
| | 01 - | | Charles G. von Arentschildt | | ☐ | | ☐ | | ☐ | | 02 - | | Robert M. Dutkowsky | | ☐ | | ☐ | | ☐ | | 03 - | | Jeffrey N. Edwards | | ☐ | | ☐ | | ☐ | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | 04 - | | Benjamin C. Esty | | ☐ | | ☐ | | ☐ | | 05 - | | Anne Gates | | ☐ | | ☐ | | ☐ | | 06 - | | Francis S. Godbold | | ☐ | | ☐ | | ☐ | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | 07 - | | Thomas A. James | | ☐ | | ☐ | | ☐ | | 08 - | | Gordon L. Johnson | | ☐ | | ☐ | | ☐ | | 09 - | | Roderick C. McGeary | | ☐ | | ☐ | | ☐ | | | | | | |
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| | 10 - | | Paul C. Reilly | | ☐ | | ☐ | | ☐ | | 11 - | | Raj Seshadri | | ☐ | | ☐ | | ☐ | | 12 - | | Susan N. Story | | ☐ | | ☐ | | ☐ | | | | | | |
*TO ELECT TWELVE (12) DIRECTORS: To hold office until the next annual meeting.
| | | | | | | | | | | | | | | | |
| | | | For | | Against | | Abstain | | | | For | | Against | | Abstain |
| 2. | | Advisory vote to approve 2019 executive compensation. | | ☐ | | ☐ | | ☐ | | 3. To approve the Amended and Restated 2012 Stock Incentive Plan. | | ☐ | | ☐ | | ☐ |
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| 4. | | To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm. | | ☐ | | ☐ | | ☐ | | This Proxy is authorized to vote in accordance with his judgment upon such other business as may properly come before the meeting. | | |
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 | | Authorized Signatures – This section must be completed for your vote to be counted. – Date and Sign Below |
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.
| | | | | | | | |
Date (mm/dd/yyyy) – Please print date below. | | | | Signature 1 – Please keep signature within the box. | | | | Signature 2 – Please keep signature within the box. |
/ / | | | | | | | | |
035W7B
Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Shareholders.
The Proxy Statement and the 2019 Annual Report to Shareholders are available at:
www.raymondjames.com/investor-relations/news-and-events/shareholders-meeting
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| | Small steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/RJF | | 
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q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.q
| | |
| Proxy – Raymond James Financial, Inc. | | + |
880 CARILLON PARKWAY, ST. PETERSBURG, FL 33716
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby revokes any proxy previously granted and appoints Paul C. Reilly and Thomas A. James, or either of them, as Proxy, each with the power to appoint his substitute, and hereby authorizes either to represent and to vote as designated herein, all the shares of Common Stock of Raymond James Financial, Inc. held of record by the undersigned on December 23, 2019 at the annual meeting of shareholders to be held on February 20, 2020, or any adjournment thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED “FOR” THE ELECTION OF DIRECTORS AND “FOR” PROPOSALS 2, 3 AND 4.
NOTICE TO PARTICIPANTS IN THE RAYMOND JAMES FINANCIAL, INC. EMPLOYEE STOCK OWNERSHIP PLAN:
This card also constitutes confidential voting instructions for participants in the Raymond James Financial, Inc. Employee Stock Ownership Plan (“ESOP”). A participant who signs on the reverse side hereby instructs the trustee of the ESOP to vote all the shares of Common Stock of Raymond James Financial, Inc. allocated to his or her ESOP Account in accordance with the instructions on the reverse side. If no instructions have been received from the ESOP participant, the trustee will vote the shares allocated to the participant’s ESOP Account in the same proportion as it votes the shares of ESOP participants who have instructed the trustee on how to vote. You cannot vote your ESOP shares in person at the meeting.Your voting instructions must be received by 5:00 p.m., Eastern Time, on February 17, 2020 to allow sufficient time for processing. The trustee of the ESOP will hold your voting instructions in complete confidence except as may be necessary to meet legal requirements.
(Continued and to be marked, dated and signed, on the other side)
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 | | Non-Voting Items |
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Change of Address – Please print new address below. | | | | Comments – Please print your comments below. |
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